AsianBondsOnline Newsletter (25 August 2014)

25-Aug-2014 Intellasia | AsianBondsOnline | 3:08 PM Print This Post

News Highlights – Week of 18 – 22 August 2014

The Composite Consumer Price Index in Hong Kong, China rose 4.0% year-on-year (y-o-y) in July, following a 3.6% increase in June, buoyed by accelerating price hikes in electricity, gas, and water; miscellaneous goods; and miscellaneous services. Malaysia’s consumer price inflation slipped to 3.2% y-o-y in July from 3.3% in June on the back of slower rates of increase in food prices and transport costs. Viet Nam’s consumer price inflation decelerated to 4.3% y-o-y in August from 4.9% in July due to slower price hikes in food, housing, transportation, and most other consumer goods.  Producer prices in the Republic of Korea climbed 0.2% y-o-y in July, after a 0.1% increase in June, amid a slower rate of decline in prices for manufacturing industry products and a faster rate of increase in services costs.

* Thailand’s real gross domestic product (GDP) grew 0.4% y-o-y in 2Q14 following a 0.5% contraction in 1Q14, buoyed by positive growth in household spending and net exports on the demand side, and output growth in the agriculture and non-agriculture sectors on the supply side.

*Japan’s merchandise exports rose 3.9% y-o-y in July, a faster clip than import growth of 2.3%, resulting in a narrowing of the merchandise trade deficit. Singapore’s non-oil domestic exports dropped 3.3% y-o-y in July after recording a 4.6% decline in June amid decreases in both electronics and non-electronics domestic exports.

* The Republic of Korea’s external debt climbed by US$16.8 billion in 2Q14 amid quarterly increases in both short-term and long-term external debt; the stock of total external debt leveled off at US$442.2 billion at end-June.

*       Fitch Ratings has affirmed the Republic of Korea’s long-term local currency (LCY) and foreign currency (FCY) issuer default ratings at AA and AA–, respectively, maintaining a stable outlook on these ratings. The rating agency noted the resilient growth of the economy, the moderation in government debt, the sustained budget surplus position, and the strengthening of its external finances as factors supportive of the ratings.

* LCY corporate debt issuance in the Republic of Korea climbed 36.0% month-on-month (m-o-m) to KRW11.4 trillion in July, led by monthly increases in the issuance of financial bonds and non-financial corporate bonds.

* CapitaLand Treasury, a subsidiary of CapitaLand based in Singapore, priced SGD500 million of 10-year fixed-rate notes at a coupon rate of 3.80% last week. In Thailand, Toyota Leasing (Thailand) raised THB10 billion from a dual-tranche bond sale—consisting of THB8 billion of 5-year bonds carrying a coupon rate of 3.85%, and THB2 billion of 2-year, 8-month bonds offering a 3.30% coupon. Metallurgical Corporation of China priced US$500 million worth of 3-year bonds at a coupon rate of 2.5% last week.

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

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