GDP growth in the People’s Republic of China (PRC) accelerated to 9.8 percent year-on-year (y-o-y) in 4Q10 compared with 9.6 percent in 3Q10. Furthermore, the PRC’s growth rate for 2010 as a whole rose to 10.3 percent, the fastest rate in 3 years and well above the 9.2 percent growth rate in 2009.
Additionally, urban fixed-asset investment rose by 24.5 percent for 2010 as a whole, retail sales grew by 18.4 percent, and industrial value-added rose by 15.7 percent. Some market observers are concerned, however, that such a strong growth outcome for 2010 will lead to tighter monetary policy measures to ensure that inflation remains at manageable levels in 2011.
*Consumer price inflation fell in the PRC to 4.6 percent y-o-y in December, down from 5.1 percent in November. In Hong Kong, China, consumer price inflation accelerated to 3.1 percent y-o-y in December from 2.9 percent in November. Malaysia’s consumer price inflation rose to 2.2 percent y-o-y in December, the highest level since May 2009.
*Moody’s Investors Service raised Indonesia’s FCY and LCY debt ratings last week to Ba1 from Ba2, with a stable outlook.
*Last week, Chinese property developer Hopson Development Holdings issued $300 million worth of senior notes maturing in 2016. Also, West China Cement offered its first US dollar issue last week with $400 million worth of 5-year non-call-three bonds. In Hong Kong, China, Shui On Land issued synthetic CNY-denominated bonds worth CNY3.5 billion just 1 month after its first such issue in December. In the Philippines, Ayala Land Inc raised PHP10.0 billion to fund capital expenditures in 2011 from the issuance of fixed-rate corporate notes in three tranches.
*LCY corporate bond issuance in the Republic of Korea fell 25.3 percent month-on-month (m-o-m) in December to KRW7.3 trillion, according to data of the Financial Supervisory Service (FSS). The FSS reported that issuance of FCY bonds by domestic banks fell to $80 million in December, a significant decline from $1.58 billion in November. Meanwhile, the average remaining maturity of the Republic of Korea’s LCY bonds held by foreign investors climbed to 2.3 years at end-2010 from 1.8 years at end-2009.
*In the Philippines, overseas remittances rose by 10.5 percent y-o-y to $1.61 billion in November, although they were marginally down from $1.67 billion in October. Meanwhile, data from Bangko Sentral ng Pilipinas (BSP) reported a balance of payments surplus of $1.23 billion for the month of December, slightly higher than $1.22 billion surplus in the same month in 2009. The Philippines reported a cumulative balance of payments surplus of $14.40 billion for all of 2010.
*Government bond yields rose last week for all maturities in the PRC, Indonesia, Republic of Korea, the Philippines, and Vietnam, as well as for most tenors in Thailand. Yield movements were mixed in Hong Kong, China; Malaysia; and Singapore. Yield spreads between 2- and 10-year maturities increased in the PRC; Hong Kong, China; Singapore; and Vietnam, while spreads fell in most other emerging East Asian markets.
*WHAT’S NEW: AsianBondsOnline data on FCY bonds outstanding (http://asianbondsonline.adb.org/regional/data/bondmarket.php?code=FCY_Bonds_Outstanding&src=wdh) now includes offshore bond issuances. This indicator can be found in the data section of each market as well as in the Regional Overview section.
To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20110124.pdf?src=wdh&id=zWVR27CcTl8yrqtNtzMNwepoktSGBt