AsianBondsOnline Newsletter (12 January 2015)

News Highlights - Week of 5 - 9 January 2015

In the People’s Republic of China (PRC), consumer price inflation rose to 1.5% year-on-year (y-o-y) in December from 1.4% in November. For full-year 2014, consumer prices rose 2.0%, which was below the government’s target of 3.5%. In contrast, producer prices fell 3.3% y-o-y in December following a 2.7% drop in November. In the Philippines, inflation further eased to 2.7% y-o-y in December from 3.7% in November, while inflation for full-year 2014 stood at 4.1%. In Thailand, inflation fell to 0.6% y-o-y in December, the lowest level in 62 months, while the full-year 2014 average stood at 1.9%. 

*     Exports from Malaysia inched up 2.1% y-o-y in November after falling 3.2% in October, while imports rose a marginal 0.1% y-o-y in November after rising 9.1% in the previous month. A trade surplus amounting to MYR 11.1 billion was recorded in November, up from only MYR1.2 billion in October. In the Philippines, merchandise exports increased 19.7% y-o-y to US$5.2 billion in November.

*     Industrial production growth in Malaysia eased to 4.7% y-o-y in November following revised growth of 5.1% a month earlier. The PRC’s manufacturing Purchasing Managers Index (PMI) fell to 50.1 in December from 50.3 in November. Meanwhile, the non-manufacturing PMI rose to 54.1 in December from 53.9 in November. In Singapore, the PMI for the manufacturing sector fell below the 50-point threshold to 49.6 in December from 51.8 in November.

*     Last week, the Philippines priced US$2.0 billion worth of 25-year global bonds. The issue size consisted of US$1.5 billion worth of exchange offers from existing bondholders, while the remaining US$500 million comprised new issuance. The bonds were priced at 3.95%, lower than the initial pricing guidance of 4.2%. The Indonesian government priced a total of US$4.0 billion of bonds in a dual-tranche sale. The bonds consisted of US$2.0 billion of 10-year bonds carrying a coupon of 4.125% and a yield of 4.2%, and US$2.0 billion of 30-year bonds with a coupon of 5.125% and a yield of 5.2%.

*     In the Republic of Korea, foreign investors sold a net KRW0.1 trillion worth of local currency (LCY) bonds in December, a reversal from net bond investment of KRW0.5 trillion made in November. For full-year 2014, net foreign investment in LCY bonds in the Republic of Korea stood at KRW5.2 trillion, up from KRW3.5 trillion in 2013.

*     Last week, the State Bank of Viet Nam adjusted the average interbank exchange rate by 1%, from VND21,246 to VND21,458 per United States (US) dollar.

*     China Huarong Asset Management issued a multi-tranche US$3.2 billion bond last week. The 3-year US$600 million tranche carries a coupon rate of 3.5%, while the 5-year US$1.2 billion tranche carries a coupon rate of 4.5%. The 10-year US$1.4 billion tranche has a coupon of 5.5%.

*     Yields rose for most tenors in Malaysia. Yields fell for all tenors in the Republic of Korea; while yields fell for most tenors in other emerging East Asia markets. The 2-year versus 10-year spread fell in Hong Kong, China, the Republic of Korea, Malaysia, Singapore and Thailand, but rose in other markets. 

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