22 September 2014 asianbondsonline.adb.org ……………………………………………………………………………………………………………..……………..…… Key Developments in Asian Local Currency Markets 1 ast week, the People’s Bank of China (PBOC) engaged in a series of actions to increase liquidity in the market. The PBOC provided a total of CNY500 billion through 3-month, low-interest rate loans for CNY100 billion each to Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications. In addition, the PBOC also sold CNY10 billion worth of repurchase agreements at a rate of 3.5% on 18 September, compared with a rate of 3.7% in its prior auction on 16 September. The Bank of Thailand’s Monetary Policy Committee decided on 17 September to maintain the policy rate at 2.00%. In its Monetary Policy Committee meeting held on 18 September, Bank Negara Malaysia decided to keep its overnight policy rate steady at 3.25%. Consumer price inflation in Malaysia inched up to 3.3% year-on-year (y-o-y) in August from 3.2% in July, due to price increases in food (3.3%), transportation (5.5%), restaurants and hotels (5.1%), and housing costs (3.4%). In the Republic of Korea, producer prices fell 0.2% y- o-y in August, after gaining 0.2% in the preiovus month. Japan's merchandise trade deficit narrowed to JPY948.5 billion in August from JPY971.4 billion a year earlier. Goods exports declined 1.3% y-o-y to JPY5.7 trillion, while imported goods declined 1.5% to JPY6.6 billion. In Singapore, non-oil domestic exports (NODX) grew 6.0% y-o-y in August, after falling 3.3% a month earlier, due mainly to increases in non- electronic NODX. In the Philippines, personal remittances from overseas Filipinos rose 7.1% y-o-y in July to reach US$2.3 billion. Retail sales in Singapore climbed 5.5% y-o-y in July compared with 0.4% growth a month earlier, boosted by a rise in vehicle sales. Over-the-counter bond trading volume in the Republic of Korea stood at KRW499.9 trillion in July, according to data from the Korea Financial Investment Association, which was up KRW30.0 trillion from the previous month, but down KRW19.4 trillion from a year earlier. Last week, Honghua Group, an oil rig equipment provider from the People’s Republic of China (PRC), raised US$200 million from a 5-year bond sale at a coupon rate of 7.45%. Korea Western Power Company priced a US$300 million 5-year bond at a coupon rate of 2.625% last week. Prueksa Real Estate in Thailand sold THB2.0 billion worth of 2.75-year bonds at a coupon rate of 3.61%, and another THB2.0 billion worth of 3.5-year bonds carrying a 3.80% coupon. Government bond yields fell for all tenors in the PRC, due to the PBOC’s liquidity injection, while yields for most tenors fell in the Republic of Korea, Malaysia, and Viet Nam. On the other hand, yields rose for most tenors in Hong Kong, China and Singapore in response to US yield movements. Yields also rose for most tenors in Indonesia on the back of foreign outflows in expectations of a rise in US policy rates. Yield movements were mixed in the Philippines and Thailand. The spread between 2- and 10-year bonds widened in Hong Kong, China; the Republic of Korea; the Philippines; and Singapore; and narrowed in all other emerging East Asian markets. The September issue of the Asia Bond Monitor (ABM) will be released on 23 September in Beijing and will available for download on the AsianBondsOnline website. L Asia Bond Monitor June 2014 read more 10-Year Selected LCY Government Security Yields Close of 19 September 2014 basis point change from Markets Latest Closing Previous Day* Previous Week* 1-Jan-14* Selected Benchmark Yield Curves - Local Currency Government Bonds Policy Rate versus Inflation Rate Charts Government Security Yields Credit Default Swap Spreads & Exchange Rate Indexes Selected Debt Security Issuances Selected Asia Data Releases 2-versus-10 Yield Spread Chart US 2.57 -3.99 -3.60 -45.37 EU 1.04 -3.80 -3.90 -88.60 Japan 0.56 -0.50 -1.40 -17.70 PRC 4.20 -10.00 -10.00 -42.00 Hong Kong, China 2.13 3.00 10.50 -17.20 India 8.46 0.30 -4.70 -39.20 Indonesia 8.20 -6.50 0.70 -21.30 Korea, Rep. of 3.03 1.10 1.90 -55.50 Malaysia 3.95 -4.30 -4.30 -17.90 Philippines 4.20 0.00 -2.06 59.92 Singapore 2.57 5.00 7.00 1.00 Thailand 3.67 -1.30 0.40 -22.70 Viet Nam 9.50 0.00 0.00 0.00 -3.60 -3.90 -1.40 -10.00 10.50 -4.70 0.70 1.90 -4.30 -2.06 7.00 0.40 0.00
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Key Developments in Asian Local Currency Markets L...asiandbonsonline.adb.orgThe PBOC provided a total of CNY500 billion through 3-month, low-interest rate loans for CNY100 billion
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ast week, the People’s Bank of China (PBOC) engaged in a series of actions to increase liquidity in the market. The PBOC provided a total of CNY500 billion through 3-month, low-interest rate loans for CNY100 billion each to Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications. In addition, the PBOC also sold CNY10 billion worth of repurchase agreements at
a rate of 3.5% on 18 September, compared with a rate of 3.7% in its prior auction on 16 September.
The Bank of Thailand’s Monetary Policy Committee decided on 17 September to maintain the policy rate at 2.00%. In its Monetary Policy Committee meeting held on 18 September, Bank Negara Malaysia decided to keep its overnight policy rate steady at 3.25%.
Consumer price inflation in Malaysia inched up to 3.3% year-on-year (y-o-y) in August from 3.2% in July, due to price increases in food (3.3%), transportation (5.5%), restaurants and hotels (5.1%), and housing costs (3.4%). In the Republic of Korea, producer prices fell 0.2% y-o-y in August, after gaining 0.2% in the preiovus month.
Japan's merchandise trade deficit narrowed to JPY948.5 billion in August from JPY971.4 billion a year earlier. Goods exports declined 1.3% y-o-y to JPY5.7 trillion, while imported goods declined 1.5% to JPY6.6 billion. In Singapore, non-oil domestic exports (NODX) grew 6.0% y-o-y in August, after falling 3.3% a month earlier, due mainly to increases in non-electronic NODX.
In the Philippines, personal remittances from overseas Filipinos rose 7.1% y-o-y in July to reach US$2.3 billion. Retail sales in Singapore climbed 5.5% y-o-y in July compared with 0.4% growth a month earlier, boosted by a rise in vehicle sales.
Over-the-counter bond trading volume in the Republic of Korea stood at KRW499.9 trillion in July, according to data from the Korea Financial Investment Association, which was up KRW30.0 trillion from the previous month, but down KRW19.4 trillion from a year earlier.
Last week, Honghua Group, an oil rig equipment provider from the People’s Republic of China (PRC), raised US$200 million from a 5-year bond sale at a coupon rate of 7.45%. Korea Western Power Company priced a US$300 million 5-year bond at a coupon rate of 2.625% last week. Prueksa Real Estate in Thailand sold THB2.0 billion worth of 2.75-year
bonds at a coupon rate of 3.61%, and another THB2.0 billion worth of 3.5-year bonds carrying a 3.80% coupon.
Government bond yields fell for all tenors in the PRC, due to the PBOC’s liquidity injection, while yields for most tenors fell in the Republic of Korea, Malaysia, and Viet Nam. On the other hand, yields rose for most tenors in Hong Kong, China and Singapore in response to US yield movements. Yields also rose for most tenors in Indonesia on the back of foreign outflows in expectations of a rise in US policy rates. Yield movements were mixed in the Philippines and Thailand. The spread between 2- and 10-year bonds widened in Hong Kong, China; the Republic of Korea; the Philippines; and Singapore; and narrowed in all other emerging East Asian markets.
The September issue of the Asia Bond Monitor (ABM) will be released on 23 September in Beijing and will available for download on the AsianBondsOnline website.
L
Asia Bond Monitor June 2014 read more
10-Year Selected LCY Government Security Yields
Close of 19 September 2014
basis point change from Markets Latest Closing Previous Day* Previous Week* 1-Jan-14*
Selected Benchmark Yield Curves - Local Currency Government Bonds
Policy Rate versus Inflation Rate Charts
Government Security Yields
Credit Default Swap Spreads & Exchange Rate Indexes Selected Debt Security Issuances Selected Asia Data Releases
PBOC Increases Market Liquidity ........................................................................................................................................ The People’s Bank of China (PBOC) provided a total of CNY500 billion through 3-month, low-interest rate loans for CNY100 billion each to Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, and Bank of Communications. In addition, the PBOC also sold CNY10 billion worth of repurchase agreements at a rate of 3.5% on 18 September, compared with a rate of 3.7% in its prior auction on 16 September.
Policy Rates Maintained in Thailand and Malaysia ........................................................................................................................................ The Bank of Thailand’s Monetary Policy Committee decided on 17 September to maintain the policy rate at 2.00%. In its monetary policy decision, the committee noted the gradual recovery of the global economy, improvement in domestic demand, supply-side constraints affecting the country’s exports, and stable inflation in the domestic economy.
In its Monetary Policy Committee meeting held on 18 September, Bank Negara Malaysia decided to keep its overnight policy rate steady at 3.25%. Bank Negara Malaysia deemed its current monetary policy stance to be supportive of growth. Inflation is expected to be relatively stable as the effects of price adjustments in utilities and energy have diminished.
For policy rate trends in Thailand, refer to this link: http://asianbondsonline.adb.org/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends
For policy rate trends in Malaysia, refer to this link: http://asianbondsonline.adb.org/malaysia/data/marketwatch.php?code=policy_rate_and_inflation_trends
Consumer Price Inflation Rises in Malaysia in August;
Producer Prices Slip in the Republic of Korea in August ........................................................................................................................................ Consumer price inflation in Malaysia inched up to 3.3% year-on-year (y-o-y) in August from 3.2% in July due to price increases in food (3.3%), transportation (5.5%), restaurants and hotels (5.1%), and housing costs (3.4%), which together contributed to nearly two-thirds of the increase in inflation. On a month-on-month (m-o-m) basis, the consumer price index (CPI) increased by 0.2%.
In the Republic of Korea, producer prices fell 0.2% y-o-y in August after gaining 0.2% a month earlier. All major sectors posted declines except for the services sector and the electricity, power, gas, and water supply sector. Between July and August, the producer price index declined 0.1%.
For inflation rate trends in Malaysia, refer to this link: http://asianbondsonline.adb.org/malaysia/data/marketwatch.php?code=policy_rate_and_inflation_trends
Japan’s Merchandise Trade Deficit Narrows in August;
Singapore’s NODX Rises 6.0% y-o-y in August ........................................................................................................................................ Japan's merchandise trade deficit narrowed to JPY948.5 billion in August from JPY971.4 billion a year earlier as imports declined at a faster pace than exports. Goods exports declined 1.3% y-o-y to JPY5.7 trillion, while imported goods declined 1.5% to JPY6.6 billion.
In Singapore, non-oil domestic exports (NODX) grew 6.0% y-o-y in August, after falling 3.3% a month earlier, due mainly to increases in non-electronic NODX. The volume of NODX climbed in all of the 10 largest NODX markets except Hong Kong, China; Japan; and Thailand.
Remittances from Overseas Filipinos Rise 7.1% y-o-y in July; Retail Sales in Singapore Climb 5.5% in July ........................................................................................................................................ In the Philippines, personal remittances from overseas Filipinos rose 7.1% y-o-y in July to reach US$2.3 billion. The United States; Saudi Arabia; United Arab Emirates; United Kingdom; Singapore; Japan; Canada; and Hong Kong, China remained the top sources of cash remittances coursed through banks. Personal remittances to the Philippines in the first 7 months of the year totaled US$15.0 billion, up 6.4% y-o-y.
Remittances from Overseas Filipinos Rise 7.1% y-o-y in July; Retail Sales in Singapore Climb 5.5% in July (cont…) ........................................................................................................................................ Retail sales in Singapore climbed 5.5% y-o-y in July, compared with 0.4% y-o-y growth a month earlier, boosted by a rise in vehicle sales. According to the Department of Statistics Singapore, the rise in motor vehicle sales was due mostly to lower sales volume in July following the reinstatement of loan restrictions on the purchase of used cars. Excluding motor vehicle sales, retail sales declined 0.4% y-o-y.
OTC Bond Trading Volume in the Republic of Korea Increases m-o-m and Falls y-o-y in July ........................................................................................................................................ The over-the-counter (OTC) bond trading volume in the Republic of Korea stood at KRW499.9 trillion in July, according to data from the Korea Financial Investment Association. Trading volume was up from KRW30.0 trillion in the previous month but down KRW19.4 trillion from a year earlier. By investor type, securities companies had the largest trading volume at KRW307.6 trillion, which accounted for 61.5% of the month’s total volume.
Honghua Group Prices US$200 Million 5-Year Bond;
Korea Western Power Company Prices US$300 Million 5-Year Bond;
Prueksa Real Estate Raises THB4.0 Billion from Dual-Tranche Bond Sale ........................................................................................................................................ Last week, Honghua Group, an oil rig equipment provider from the People’s Republic of China, raised US$200 million from a 5-year bond sale. The bonds carried a coupon rate of 7.45%. The bonds were well-received by investors with the order book reaching US$1.4 billion.
Korea Western Power Company priced a US$300 million 5-year bond at a coupon rate of 2.625% last week. Proceeds from the bond sale will be used by the company for general corporate purposes.
Prueksa Real Estate in Thailand sold THB2.0 billion worth of 2.75-year bonds at a coupon rate of 3.61% and another THB2.0 billion worth of 3.5-year bonds carrying a 3.80% coupon last week. Both bonds were rated A by TRIS Rating.
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News Articles: Sources for Further Reading
PBOC Increases Market Liquidity
China's Central Bank Injects $81 Billion Into Top Banks to Counter Slowdown
Wall Street Journal (17 September 2014)
China Rate Swaps Drop Most in Five Months as Repo Yield Lowered
Businessweek (18 September 2014)
Policy Rates Maintained in Thailand and Malaysia
Monetary Policy Statement
Bank Negara Malaysia (18 September 2014)
Monetary Policy Committee’s Decision on 17 September 2014
Bank of Thailand (17 September 2014)
Consumer Price Inflation Rises in Malaysia in August; Producer
Prices Slip in the Republic of Korea in August
Consumer Price Index Malaysia August 2014
Department of Statistics Malaysia (17 September 2014)
Producer Price Index during August 2014
The Bank of Korea (19 September 2014)
Japan’s Merchandise Trade Deficit Narrows in August;
Singapore’s NODX Rises 6.0% y-o-y in August
Value of Exports and Imports August 2014 (Provisional)
Ministry of Finance (18 September 2014)
Singapore’s External Trade – August 2014
International Enterprise Singapore (17 September 2014)
Remittances from Overseas Filipinos Rise 7.1% y-o-y in July;
Retail Sales in Singapore Climb 5.5% in July
Personal Remittances Sustain Robust Growth in July 2014; January-July Level Reaches US$15 Billion
Bangko Sentral ng Pilipinas (18 September 2014)
Retail sales up 5.5% on-year in July, driven by strong vehicle sales
Channel News Asia (15 September 2014)
Retail Sales Index Food & Beverage Services Index
Department of Statistics Singapore (15 September 2014)
OTC Bond Trading Volume in the Republic of Korea Increases
m-o-m and Falls y-o-y in July
KOFIA Releases the OTC Bond Market Trend Analysis for July 2014
Korea Financial Investment Association (15 September 2014)
Honghua Group Prices US$200 Million 5-Year Bond; Korea
Western Power Company Prices US$300 Million 5-Year Bond;
Prueksa Real Estate Raises THB4.0 Billion from Dual-Tranche
Bond Sale
Honghua pulls off debut issue
IFR Asia (20 September 2014)
Korea Western launches $300m bond
FinanceAsia (16 September 2014)
PS176A and PS183A are registered with ThaiBMA on September 17, 2014