AsianBondsOnline Newsletter (29 June 2015)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20150629.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 22 - 26 June 2015

Emerging East Asia’s bond markets were volatile amid increasing global concerns over the Greek debt crisis and a possible interest rate hike in the United States (US), according to the Asian Development Bank’s June edition of the Asia Bond Monitor. The region’s local currency (LCY) bond market continued to grow in 1Q15, leveling off at US$8.3 trillion at end-March, up from US$8.2 trillion at end-December. The report also examines bond financing for renewable energy and cites the importance of overcoming several policy challenges to address financing needs for renewable energy. For a copy of the full report, please click on the following link: http://asianbondsonline.adb.org/documents/abm_jun_2015.pdf

*     Hong Kong, China’s overall consumer prices rose 3.0% year-on-year (y-o-y) in May. In Japan, consumer price inflation eased to 0.5% y-o-y in May. Singapore’s Consumer Price Index (CPI) fell 0.4% y-o-y in May. Consumer price inflation in Viet Nam inched up to 1.00% y-o-y in June.

*     The People’s Bank of China lowered policy rates by 25 basis points (bps) to bring the one-year lending rate to 4.85% and the one-year deposit rate to 2.00%. It also reduced the reserve  requirement ratios for certain commercial banks by 50 bps and for finance companies by 300 bps. The Monetary Board of the Bangko Sentral ng Pilipinas decided on 25 June to keep steady the overnight borrowing rate at 4.00% and the overnight lending rate at 6.00%.

*     Hong Kong, China’s balance of payments surplus climbed to HKD36.3 billion in 1Q15 from HKD26.7 billion in 4Q14. Philippine merchandise exports fell 4.1% y-o-y in April while imports slipped 12.8% y-o-y.

*     LCY corporate debt issuance in the Republic of Korea rose to KRW11.3 trillion in May from KRW10.1 trillion in April due to a monthly increase in bank debenture issues.

*     Last week, Bank of China issued multi-currency bonds comprising a US$1 billion 3-year bond priced to yield 2.205%, an US$800 million 5-year bond at 2.932%, a US$500 million 10-year bond at 3.957%, a EUR500 million 3-year floating-rate note priced at 100 basis points above the 3-month Euro Interbank Offered Rate (Euribor), a CNY2 billion 2-year bond at 3.6%, and a SGD500 million 4-year bond at 2.75%.

*     Korea Eximbank raised US$1 billion last week from a dual-tranche bond sale, which comprised a US$600 million 5.5-year bond priced to yield 2.652% and US$400 million from the re-opening of its August 2026 bond carrying a yield of 3.337%. Singapore Telecommunications (Singtel) priced a US$500 million 10-year bond at a yield of 3.385%.

*     The Lao People’s Democratic Republic raised THB12 billion from a triple-tranche bond sale in Thailand last week. The sale comprised a THB1 billion 3-year bond at a 3.56% coupon, a THB5 billion 5-year bond at 4.32%, and a THB6 billion 10-year bond at 5.0%. Krung Thai Bank priced a MYR1 billion 10-year bond at 5.1% while Tisco Bank in Thailand issued a THB5 billion 1-year debenture at 1.75%.

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

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