News Highlights - Week of 3 - 7 October 2011
Consumer price inflation in Indonesia eased to 4.6% year-on-year (y-o-y) in September as food prices declined. In the Republic of Korea, inflation eased to 4.3% y-o-y in September from 5.3% in August. Consumer price inflation in Thailand also fell in September to 4.0% y-o-y from 4.3% in the previous month due to a slowdown in rising energy prices and transport costs. Meanwhile, inflation in the Philippines inched up to 4.8% y-o-y in September from 4.7% in August.
*The People's Republic of China's (PRC) purchasing managers' index (PMI) for services rebounded to 59.3 in September from 57.3 in August, indicating a recovery in the services sector. In contrast, Singapore's manufacturing activity contracted for the third straight month in September, with the PMI at 48.3 in September.
*Indonesia's export growth eased to 37.1% y-o-y in August for total exports of USD18.8 billion after posting revised 39.5% annual growth in July. Indonesia's imports rose 23.7% y-o-y to USD15.1 billion in August, following revised 28.4% growth in the previous month. The trade surplus in August was USD3.8 billion. Malaysia's merchandise exports posted 10.9% growth in August, higher than the 7.1% export growth rate for July. Meanwhile, imports grew 6.9% y-o-y in August.
*Bank Indonesia (BI) issued new regulations governing export proceeds and foreign debt withdrawals. Under the new policy, exporters will be required to transfer their proceeds from offshore banks into domestic banks within 3 months of the date posted on the Export Declaration Form. Another new BI regulation requires debtors to conduct their foreign borrowing through domestic banks.
*Net foreign investment outflows from the Republic of Korea's LCY bond market were KRW2.5 billion in September. Net inflows in August totaled KRW134.0 billion. The largest net bond investment inflows in September came from Thailand (KRW726.5 billion), the US (KRW619.3 billion), Malaysia (KRW603.8 billion), and the PRC (KRW 400.3 billion).
*Thailand plans to begin targeting headline inflation instead of core inflation to attain greater flexibility in conducting monetary policy.
*The State Bank of Viet Nam raised its refinancing rate, one of its three policy rates, by 100 basis points to 15% effective today. The move is the fifth increase in the refinancing rate for the year.
*In Hong Kong, China, Sinotrans Shipping Inc. priced 3-year CNH bonds with a coupon of 3.3%. In Malaysia, Midciti Resources, which co-owns the Petronas Towers, sold MYR880 million worth of Islamic medium-term notes. The multi-tranche issuance include MYR280 million worth of 3-year notes with a 3.533% annual return, MYR270 million of 5-year notes at 3.919%, MYR240 million of 7-year notes at 4.07%, and MYR90 million of 10-year notes at 4.25%.
*Government bond yields fell last week for all tenors in the Republic of Korea and Thailand; and for most tenors in Hong Kong, China; and Malaysia, while yields rose for most tenors in Indonesia, the Philippines, Singapore and Viet Nam. The PRC market was closed due to the national holiday. Yield spread between 2- and 10- maturities widened only in Malaysia, while spreads narrowed in other emerging East Asian markets except for the PRC.
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News Highlights - Week of 26 - 30 September 2011
Hong Kong, China's export growth moderated to 6.8% year-on-year (y-o-y) in August from 9.3% in July amid a weaker global economy. In the Republic of Korea, export growth in September eased to 19.6% y-o-y in September from 25.9% in August, while its current account surplus narrowed to USD0.4 billion in August from USD3.8 billion in July. The Philippines' trade deficit in July stood at USD570 million compared with USD183 million in July 2010. Thailand's trade surplus fell to USD705 million in August from USD2.7 billion in July as export growth eased and import growth surged. Viet Nam's exports rose 33.6% y-o-y in September while imports climbed 31.0% y-o-y.
*Viet Nam's cumulative GDP growth rate for January-September was reported at 5.8% y-o-y last week. The People's Republic of China's (PRC) Purchasing Managers' Index improved to 51.2 in September from 50.9 in August. Industrial production in Japan and the Republic of Korea expanded 0.6% and 4.8% y-o-y, respectively, in August. Factory output growth in the Philippines quickened to 6.8% y-o-y in July from 1.2% in June. Singapore's manufacturing output grew 21.7% y-o-y in August, largely due to strong growth in biomedical products.
*Consumer price inflation in Japan stood at 0.2% y-o-y in August, while in Viet Nam inflation reached 22.4% y-o-y in September on the back of a sharp rise in food prices.
*Last week, two banks in the Republic of Korea-Hana Bank and Woori Bank-issued 3-year bonds worth THB8.0 billion and MYR315 million, respectively, while Malaysia's AmIslamic Bank priced MYR600 million of 10-year subordinated notes.
*LCY corporate bond issuance in the Republic of Korea rose 27.1% month-on-month (m-o-m) in August, led by strong issuance growth in bank debentures and asset-backed securities.
*China Railway Construction announced last week its plan to issue CNY7.5 billion worth of medium-term notes. Shanghai Pudong Development Bank aims to sell CNY18.4 billion of subordinated debt. Indonesia plans to sell retail bonds with tenors of 3 years on 26 October. Krungthai Card intends to raise THB7.0 billion from a dual-tranche bond sale on 10 October. Thailand's Central Pattana aims to issue THB2 billion of 5-, 7-, and 10-year bonds.
*The PRC banking sector's assets grew 16.6% y-o-y to CNY104.4 trillion, while bank liabilities rose 16.0% y-o-y to CNY97.8 trillion in August.
*Government bond yields fell for all tenors last week in the PRC and Indonesia and for most tenors in Thailand and Viet Nam. Yields rose for all tenors in Hong Kong, China; Republic of Korea; and Singapore, and for most tenors in Malaysia. Yield movements were mixed in the Philippines. Yield spreads between 2- and 10-year tenors widened in the PRC; Hong Kong, China; Republic of Korea; and Singapore, while spreads narrowed in most other emerging Asian markets.
*Finally, some of the more interesting economic data due this week include consumer price inflation for Republic of Korea and the Philippines; export growth and trade balance for Malaysia; money supply for Japan and Indonesia; and foreign reserves for Hong Kong, China and the Philippines.
