AsianBondsOnline Newsletter (30 June 2014)

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20140630.pdf?src=newsletter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 23 - 27 June 2014

Consumer prices in Hong Kong, China rose 3.7% year-on-year (y-o-y) in May, the same rate of increase as in April. Consumer price inflation in Japan accelerated to 3.7% y-o-y in May from 3.4% in April amid sharper price increases for food, transportation, and utilities. Consumer price inflation in Singapore climbed to 2.7% y-o-y in May from 2.5% in April led by hikes in transport costs. On a month-on-month (m-o-m) basis, consumer prices in Singapore rose 0.5% in May. In Viet Nam, consumer price inflation increased to 5.0% y-o-y in June from 4.7% in May on the back of price hikes in food, housing, and transport costs. 

*     Viet Nam’s gross domestic product (GDP) grew at a faster pace in 2Q14, expanding 5.3% y-o-y following revised 5.1% growth in 1Q14. For the first half of 2014, GDP growth stood at 5.2% y-o-y. Meanwhile, Viet Nam’s exports and imports grew 14.9% and 11.0% y-o-y, respectively, in 1H14.

*     Hong Kong, China’s merchandise exports grew 4.9% y-o-y in May following a 1.6% fall in April, while its merchandise imports expanded 3.7% y-o-y in May after recording 2.4% growth in April. In the Philippines, merchandise export growth slipped to 1.3% y-o-y in April from 12.4% in March, and merchandise import growth fell to 3.0% in April from 10.6% in March. 

*     The Republic of Korea’s current account surplus widened to US$9.3 billion in May from US$7.1 billion in April. Hong Kong, China’s current account balance was in a deficit position amounting to HKD6.2 billion in 1Q14 after posting a surplus of HKD16.4 billion in 4Q13. 

*     Manufacturing production in the Republic of Korea dropped 2.3% y-o-y in May following 2.7% growth in April. Singapore’s manufacturing output contracted 2.5% y-o-y in May after recording 5.3% growth in April. 

*     Local currency (LCY) corporate debt issuance in the Republic of Korea amounted to KRW10.6 trillion in May, down 0.1% m-o-m, according to data from the Financial Supervisory Service (FSS). Issuance of asset-backed securities (ABS), bank debentures, and bonds issued by financial companies were up from a month earlier, while issuance of non-financial corporate bonds was down on a m-o-m basis.

*     Greenland, a property developer in the People’s Republic of China (PRC), last week priced a US$600 million 10-year bond at a coupon rate of 5.875% and a US$400 million 5-year bond offering a coupon of 4.375%. Korea Gas Corporation priced a US$500 million 12-year bond at a coupon rate of 3.5% last week. Krung Thai Bank sold a US$700 million Basel III-compliant 10.5-year bond at a 5.2% coupon last week.  

*     Government bond yields fell last week for most tenors in Hong Kong, China; Malaysia; the Philippines; Singapore; and Viet Nam. Yields rose for all tenors in Indonesia and for most tenors in the Republic of Korea. Yield movements were mixed in the PRC and Thailand. Yield spreads between 2- and 10-year tenors widened in the PRC, the Philippines, and Viet Nam, while spreads narrowed in Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; Singapore; and Thailand.  

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