To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20141117.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx
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News Highlights - Week of 10 - 14 November 2014
Hong Kong, China’s gross domestic product (GDP) growth
rose to 2.7% year-on-year (y-o-y) in 3Q14 from 1.8% in 2Q14. The improvement in
GDP growth was driven by private consumption expenditure and net services
exports. Private consumption expenditure rose 3.2% y-o-y in 3Q14 versus 1.2% in
the prior quarter, and growth in services exports rebounded to 2.0% y-o-y in
3Q14 from –2.0% in 2Q14. In Malaysia, real GDP growth slowed to 5.6% y-o-y in
3Q14 from 6.5% y-o-y in the previous quarter. The easing expansion was mainly
due to slower y-o-y growth in the services (6.1% from 6.2%), manufacturing
(5.3% from 7.3%), and construction (9.6% from 9.9%) sectors.
* The People’s
Republic of China’s (PRC) industrial production growth rate fell to 7.7% y-o-y
in October from 8.0% in September. In Malaysia, industrial production growth
slowed to 5.4% y-o-y in September from 6.5% in August as manufacturing and
electricity output growth eased.
* Last week, key
policy rates were held steady in Indonesia (7.5%) and the Republic of Korea
(2.0%).
* Indonesia’s
current account deficit narrowed to US$6.8 billion (equivalent to 3.1% of GDP)
in 3Q14 from US$8.7 billion (equivalent to 4.1% of GDP) in the previous
quarter. In Malaysia, the current account surplus declined to MYR7.6 billion in 3Q14 from a surplus of
MYR16.0 billion posted in 2Q14. Meanwhile, merchandise exports from the
Philippines increased 15.7% y-o-y to US$5.8 billion in September.
* Last week,
Bank Negara Malaysia and the People’s Bank of China signed a memorandum of
understanding (MOU) regarding the establishment of renminbi clearing services
in Malaysia. Under the MOU, both central banks agreed to work together on the
regulation of renminbi trading in Malaysia. The MOU is a first step in the
establishment of an official renminbi clearing bank in Malaysia.
* On 13
November, Fitch Ratings affirmed Indonesia’s sovereign credit ratings at
BBB–. The outlook on the rating is
stable.
* Foreign net
bond investment in the Republic of Korea climbed to KRW1.3 trillion in October
from KRW0.5 trillion in September on the back of bond purchases by investors
from Asia and Europe, according to Financial Supervisory Service data released
last week. By country of investor, France recorded the largest net bond
investment inflows for the month of October at KRW0.5 trillion, followed by
Singapore at KRW0.2 trillion. In contrast, the United States (US) posted the
largest net bond outflows at KRW0.3 trillion in October.
* ICICI Bank
last week issued a 3-year dim sum bond at a coupon rate of 4.0% and a size of
CNY600 million. Bank of East Asia last week announced that it will issue a
Basel III-compliant Tier 2 bond with a maturity of 10 years (non-callable in
the first 5 years). The planned issue size is US$500 million.
* Government bond
yields rose last week for all tenors in the Republic of Korea, Malaysia, and
Viet Nam. In the Republic of Korea, the policy rate was held steady, while
Malaysian yields tracked US bond yield movements. Yields fell for all tenors in
Hong Kong, China and for most tenors in Indonesia and Thailand, while yields
were mixed in the PRC, the Philippines, and Singapore. The spread between the
2- and 10-year maturities narrowed in Indonesia, the Philippines, Singapore,
and Viet Nam, while widening for most other markets in emerging East Asia.
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