News Highlights - Week of 11 - 15 July 2011
The People's Republic of China's (PRC) gross domestic product (GDP) expanded 9.5% year-on-year (y-o-y) in 2Q11, down slightly from 9.7% in 1Q11, driven primarily by growth in manufacturing and services. Meanwhile, Singapore's GDP growth slowed significantly to 0.5% y-o-y in 2Q11, according to advanced estimates released by the Ministry of Trade and Industry. This reflected a slowdown in many sectors, in particular manufacturing, which contracted 5.5% y-o-y in 2Q11 versus growth of 16.4% in 1Q11.
* The PRC's industrial production grew 15.1% y-o-y in June after growth of 13.3% in May. In the Republic of Korea, sales growth for key department stores fell to 8.2% y-o-y in June from 8.7% in May, while major discount stores' sales rose to 2.7% in June from 2.4% in May. Malaysia's industrial production index dropped 5.1% y-o-y in May, while growth in manufacturing sales slowed to 8.0% in May from 15.2% in April.
* The Bank of Thailand (BOT) raised its 1-day repurchase rate by 25 basis points to 3.25% in its Monetary Policy Committee meeting on 13 July. On 12 July, Bank Indonesia's (BI) Board of Governors decided to keep its reference rate steady at 6.75%. The Bank of Korea's (BOK) Monetary Policy Committee also decided to maintain its base rate-the 7-day repurchase rate-at 3.25% in its 14 July meeting. The Bank of Japan (BOJ) unanimously decided last week to keep the uncollateralized overnight call rate between zero and 0.1 percent.
* In the PRC, M2 money supply growth accelerated in June to 15.9% y-o-y from 15.1% in May. The growth rate in Japan's M2 money supply climbed to a 12-month high of 2.9% y-o-y in June. In the Philippines, the M3 money supply expanded 8.0% y-o-y in May, compared with 7.3% growth in April. Meanwhile, M2 money supply growth for the Republic of Korea slowed to 3.7% from 3.9% in the previous month.
* The Securities Commission of Malaysia issued revised guidelines for private debt securities and sukuk (Islamic bonds) last week. The revised guidelines streamline the approval process and time-to-market for the issuance of corporate bonds and sukuk. The revised guidelines also remove the mandatory rating requirement for selected issues or offers, and provide for greater disclosure of relevant information for debenture holders.
* The Philippine Bureau of the Treasury completed its sixth domestic bond exchange program last week, garnering the highest level of participation to date. A total of PHP299.4 billion worth of bonds were offered in exchange for new 10.5- and 20-year bonds.
* The PRC's Intime Department Store issued CNH1 billion worth of 3-year bonds last week. In the Republic of Korea, Kookmin Bank issued USD300 million of 5.5-year bonds. Singapore Telecommunications (SingTel) issued SGD250 million of 5-year bonds, while the State Railway of Thailand issued THB1 billion of 12-year bonds.
* Government bond yields fell last week for all tenors in the Republic of Korea, and for most tenors in Hong Kong, China; Malaysia; Singapore; and Viet Nam. Yields rose for all tenors in Thailand, and for most tenors in the PRC, Indonesia, and the Philippines. Yield spreads between 2- and 10- year maturities widened in Indonesia, Thailand and Viet Nam, while spreads narrowed in most other emerging East Asian markets.
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