AsianBondsOnline Newsletter (14 April 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140414.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 7 - 11 April 2014

Viet Nam's real gross domestic product (GDP) expanded 5.0% year-on-year (y-o-y) in 1Q14, following 6.0% growth in 4Q13, led by the services sector and industry and construction. Exports expanded 14.1% y-o-y in 1Q14, after growing 12.3% in the first 2 months of the year, while imports registered an increase of 12.4%. The trade surplus amounted to US$1.0 billion for the quarter. 

*     Singapore's GDP rose 0.1% y-o-y versus a 6.1% growth in 4Q13.  Malaysia's industrial production growth climbed to 6.7% y-o-y in February from revised growth of 3.5% in January. In Viet Nam, industrial production grew 4.7% y-o-y in March.

*     The People's Republic of China (PRC) announced that it will allow cross-border equity investments between Shanghai and Hong Kong, China, subject to quotas.  Hong Kong, China investors will be subject to a overall CNY300 billion quota.

*     The PRC's exports fell 6.6% y-o-y in March while imports   declined 11.3% y-o-y. The PRC reported a trade surplus of US$7.7 billion for the month. Japan's current account deficit slightly narrowed to JPY612.6 billion, due to an increase in the primary income surplus, which rose to JPY1.46 trillion in February from JPY1.41 trillion a year earlier. In the Philippines, merchandise exports jumped 24.4% y-o-y in February to US$4.7 billion.

*     The PRC's consumer prices rose 2.4% y-o-y in March following a 2.0% uptick in February. Bank Indonesia decided to keep its benchmark rate steady at 7.50% and also maintained the lending facility rate at 7.50% and deposit facility rate at 5.75%. The Bank of Japan (BOJ) announced that it would maintain its monetary easing measures. The Bank of Korea decided to keep the base rate unchanged at 2.50%.

*     Foreign investors' net investment into the Republic of Korea's local currency (LCY) bond market totaled KRW1.2 trillion in March, a turnaround from KRW1.8 trillion of net outflows in February.

*     Hong Kong, China auctioned 3-year government HKSAR bonds under the Institutional Bond Programme. A total of HKD3.0 billion was awarded at a coupon rate of 1.02%. Korea Eximbank raised AUD500 million from a dual-tranche bond sale last week, comprising a AUD300 million 5-year bond offering a 4.5% coupon and a AUD200 million 5-year floating-rate note carrying a yield based on the 3-month benchmark Bank Bill Swap Rate plus 108 basis points. Oversea-Chinese Banking Corporation raised US$1.0 billion from the issuance of 10.5-year bonds. The bonds are callable after 5.5 years and have a coupon of 4.0%.

*    The Republic of Korea's Cabinet approved the Enforcement Decree of the Covered Bond Act.   Meanwhile, the clearing of non-deliverable interest rate swaps in MYR THB was launched on the Singapore Exchange (SGX).

*     Government bond yields fell for most tenors in most markets except for the PRC and the Philippines after the European Central Bank indicated that it may conduct more monetary policy stimulus and increased safe haven investments in US treasuries due to a weakening in the US stock market.US yields fell for tenors of 1-year or longer and EU yields fell for all tenors.  The spread between 2-year and 10-year rates narrowed for all markets.

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