AsianBondsOnline News Highlights – Week of 24 – 28 January 2011

Consumer price inflation accelerated in Singapore and Vietnam mainly due to higher food prices. Singapore’s consumer price inflation climbed to 4.6 percent year-on-year (y-o-y) in December, the highest level since 2008, as prices for transport, housing, and food increased.

Vietnam’s consumer price inflation rose to 12.2 percent y-o-y in January due to higher food prices. Meanwhile, consumer prices in Japan fell 0.4 percent y-o-y in December, the smallest decline since 2009, as faster growth in emerging economies boosted the cost of food and energy worldwide.

* The Bank of Japan (BOJ) kept its target rate at 0.1 percent on 25 January in an effort to boost the country’s frail economy. Bank Negara Malaysia (BNM) also kept its benchmark rate steady at 2.75 percent on 27 January.

* On 27 January, S&P downgraded Japan’s sovereign credit rating from AA to AA- due to the country’s mounting debt burden.

* Last week, the People’s Republic of China’s (PRC) largest offshore energy company, CNOOC Limited, issued US$-denominated bonds for the first time in nearly 8 years. The bonds were issued in tranches of 10 years (USD1.5 billion at 4.426 percent) and 30 years (USD500 million at 5.789 percent). In Indonesia, Bakrie Telecom raised an additional US$130 million of its 2015 bonds, bringing the total size of the issue to US$380 million. Hyundai Capital sold US$700 million of 5.5-year bonds at a 4.375 percent coupon rate. In the Philippines, SMC Global Power sold US$300 million of 5-year bonds at a yield of 7.0 percent.

* Three offshore renminbi bond issuances were announced last week. The Macao, China branch of the Bank of China issued its first renminbi certificates of deposit worth CNY1.0 billion in 2- and 3-year tranches. The International Finance Corp (IFC) and PCD Stores also issued CNY150 million and CNY750 million bonds, respectively, in Hong Kong, China. Meanwhile, the Republic of Korea’s KT Corporation sold JPY35.0 billion of 2-year samurai bonds with a coupon rate of 1.58 percent. In Malaysia, Pengurusan Aset Air Bhd (PAAB) priced MYR2.7 billion worth of Islamic medium-term notes. In Singapore, Swiber Holdings and Fraser Centerpoint Trust issued SGD120 million and SGD60 million of 3-year notes, respectively.

* The Philippines’ Power Sector Assets and Liabilities Management Corp (PSALM) plans to issue PHP50 billion of bonds in 1Q11 to refinance existing debts. Thailand’s Siam Cement and PTT Exploration and Production (PTTEP) plan to sell THB15.0 billion and THB110.0 billion of bonds, respectively, in March.

* The Republic of Korea’s GDP growth accelerated to 4.8 percent y-o-y in 4Q10 compared with 4.4 percent y-o-y in 3Q10, driven by strong export growth. The current account surplus rose to US$2.1 billion in December from US$1.9 billion in November. The Republic of Korea’s domestic banks recorded a 3.1 percent y-o-y increase in LCY-denominated loans and securities in December, while the loan-deposit ratio fell to 98.2 percent in November.

* Government bond yields fell last week for most maturities in Hong Kong, China; Indonesia; the Philippines; and Vietnam. Yields rose for most tenors in the PRC, the Republic of Korea, Malaysia, and Thailand, while yield movements were mixed in Singapore. Yield spreads between 2- and 10-year maturities rose in Hong Kong, China; Singapore; and Vietnam while spreads fell in most other emerging East Asian markets.

To read the full report, data and graphs go to http://www.asianbondsonline.adb.org/newsletters/abowdh20110131.pdf?src=wdh&id=zWVR27CcTl8yrqtNtzMNwepoktSGBt

 

Category: FinanceAsia