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Asia Bonds - Debt Highlights - August 08, 2011

Asia Bonds - Debt Highlights - August 08, 2011

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ABO - Debt Highlights Report - August 08, 2011
ABO - Debt Highlights Report - August 08, 2011

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Published by: rryan123123 on Aug 09, 2011
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08/23/2011

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8 August 2011asianbondsonline.adb.org 
……………………………………………………………………………………………………………..……………..……
Key Developments in Asian Local Currency Markets
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tandard and Poor's downgraded its sovereign rating for the US government last week from AAA to AA+ (
). In response, government bond yields fell in most Asian bond markets. Yields fell for all tenors inIndonesia and the Republic of Korea, and for most tenors in Hong Kong, China; Malaysia; the Philippines;Singapore; and Thailand, although yields rose for most tenors in the PRC and Viet Nam. Yield spreads between2- and 10- year maturities widened in the PRC, Indonesia, the Republic of Korea and Thailand, while spreads narrowedin most other emerging East Asian markets.Consumer price inflation eased in Indonesiaand the Philippines in July, while creepingmarginally higher in Thailand. Indonesia'sconsumer prices increased 4.6% year-on-year(y-o-y) in July, down from a 5.5% rise in June.In the Philippines, consumer price inflationeased slightly to 5.1% y-o-y in July from 5.2%in June, based on 2006 inflation series data.Slower annual price hikes in energy costs andfood and non-alcoholic beverages contributedto the downtrend. Meanwhile, Thailand'sconsumer price inflation rose incrementallyhigher to 4.08% y-o-y in June from 4.06% inMay on the back of higher food and energyprices.Total bank deposits in Hong Kong, China(LCY and FCY) fell 0.9% month-on-month (m-o-m) to HKD7.2 trillion, mainly due to thedecline in Hong Kong dollar deposits, whichshrank 1.6% to HKD3.62 trillion. Hong Kong,China's M2 money supply also fell 1.3% m-o-min June. Japan's monetary base grew 15.0% y-o-y in July to reach JPY113.7 trillion.Indonesia's economy expanded 6.5% y-o-yin 2Q11, growing at the same pace it did in1Q11. Indonesia's exports grew 49.3% y-o-y toUSD18.4 billion in June. In Malaysia, exportgrowth rose to 8.6% y-o-y in June from 5.4% inMay. Singapore's purchasing managers' index(PMI) fell to 49.3 in July, after a posting 50.4 inJune, due to a slowdown in globalmanufacturing.Issuance of asset-backed securities (ABS)in the Republic of Korea soared 34.1% y-o-y toKRW14.7 trillion in 1H11, led by Korea HousingFinance Corporation. Net foreign investmentinto LCY-denominated bonds in the Republic ofKorea stood at KRW2.9 trillion in July-thehighest monthly figure in the first 7 months ofthe year. Investments from Thailand andSingapore boosted the inflows, while thelargest net outflows went to France.The Philippines incurred a budget deficit of PHP17.2 billion in1H11, which was much lower than the programmed amount ofPHP152.1 billion, as the government limited spending while revenuecollections by the Bureau of Internal Revenue (BIR) improved. Thenational government posted a fiscal deficit of PHP7.7 billion in themonth of June.China Resources Land issued USD250 million worth of 5-yearsenior notes with a coupon of 4.625%. In Hong Kong, China, thegovernment issued 10-year Hong Kong Special Administrative Region(HKSAR) government bonds worth HKD2.5 billion and carrying acoupon of 2.46%. Indonesian wood processing firm Sarana BinaSemesta Alam issued 5-year USD10 million notes with a coupon of6.0%. National Agricultural Cooperative Foundation in the Republic ofKorea priced USD500 million of 5.5-year bonds with a coupon of3.50%.Please note that the Asia Capital Markets Monitor (ACMM) for2011 will be launched on 9 August.
S
 
10-Year Selected LCY Government Security Yields
Close of 5 August 2011 
basis point change from
 
Previous Day*
 
MarketsPrevious Week*Latest Closing 1-Jan-11*
US2.5615.57-23.76-73.50EU2.354.60-19.20-61.70Japan1.01-1.60-7.50-12.10PRC4.110.002.0020.00Hong Kong, China1.95-12.50-32.70-90.30India8.32-8.60-12.9040.30Indonesia6.861.70-18.10-75.10Malaysia3.73-2.60-14.80-30.90Korea, Rep. of4.01-11.00-19.00-51.00Philippines5.943.85-13.545.27Singapore1.81-5.00-25.00-90.00Thailand4.000.00-2.7027.70Viet Nam12.59-7.900.0083.80
-23.76-19.20-7.502.00-32.70-12.90-18.10-14.80-19.00-13.54-25.00-2.700.00
 
………………………………………………………………………………………..……………………………..……...…
asianbondsonline.adb.org 
………………………………………………………………………..………………………………………………….......
EBT HIGHLIGHTS
 ASIANBONDSONLINE
 
Summary Text of News ArticlesConsumer Price Inflation Eases in Indonesia and the Philippines, Increases in Thailand
........................................................................................................................................
Consumer price inflation in Indonesia eased for a sixth consecutive month to 4.6% year-on-year (y-o-y) in July from5.5% in June. On a month-on-month (m-o-m) basis, consumer prices were up 0.9% as food prices rose ahead of thecelebration of Ramadan. Meanwhile, core inflation eased slightly to 4.55% y-o-y from 4.63% in June. Given theslowdown in inflation, it is widely expected that Bank Indonesia (BI) will keep its benchmark rate steady at 6.75% in itsmeeting scheduled on 9 August.In the Philippines, consumer prices in July rose 4.6% y-o-y for the second month in a row, based on inflation series datafrom 2000. Using 2006-based data, inflation eased to 5.1% y-o-y in July from 5.2% in June. Meanwhile, core inflationeased to 3.7% y-o-y in July from 4.0% in June, primarily due to a slower annual increase in the food and non-alcoholicbeverages index. Decelerating increases in the indices for housing, water, electricity, gas and other fuels, healthcare,transport, and restaurants and miscellaneous goods and services also contributed to the downtrend. On a m-o-m basis,inflation slowed to 0.1% in July from 0.5% in June as prices for liquefied petroleum gas (LPG) and electricity rates fell inselected provinces. Prices for rice, corn, and chicken declined in the National Capital Region, while sugar prices fellacross the country.Thailand's consumer price inflation rose marginally higher to 4.08% y-o-y in July from 4.06% y-o-y in June on the backof higher food and energy prices. On a m-o-m basis, consumer price inflation rose 0.18% in July, compared with 0.13%in June, due to a 0.2% fall in food prices and a 0.4% increase in non-food prices. Core inflation also accelerated slightlyin July to 2.59% y-o-y from 2.55% in June. The Thai Commerce Ministry expects that consumer price inflation willremain below 3.6% in 3Q11. However, the Bank of Thailand is still expected to hike its policy rate by another 25 basispoints to 3.50% at its next monetary policy meeting on 24 August.For historical statistics on Indonesia's inflation, refer to this link:http://asianbondsonline.adb.org/indonesia/data/macroeconomic_credit.php For historical statistics on the Philippines' inflation, refer to this link:http://asianbondsonline.adb.org/philippines/data/macroeconomic_credit.php For the historical statistics on Thailand's inflation, refer to this link:http://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php 
 Total Deposits Decline and Money Supply Contracts in Hong Kong, China; Money Supply Expands in Japan
........................................................................................................................................
Total deposits (LCY and FCY) in Hong Kong, China fell 0.9% m-o-m to HKD7.2 trillion in June. The decline in depositswas due mainly to a fall in Hong Kong dollar deposits, which fell 1.6% to HKD3.62 trillion. Total FCY-denominateddeposits fell 0.2% to HKD3.62 trillion. However, due to strong demand for renminbi, CNH-denominated deposits rose0.9% m-o-m to CNH553.60 billion. In line with the decline in LCY deposits, the Hong Kong dollar money supply, asmeasured by M2, fell 1.3% m-o-m in June. On a y-o-y basis, however, the money supply grew 8.4%.In Japan, the monetary base expanded 15.0% y-o-y to JPY113.7 trillion in July-the 35th consecutive month of growth inthe money supply as the Bank of Japan (BOJ) continues to flood the market with funds. The current account deposits ofprivate banks at the BOJ increased 73.3% y-o-y to JPY 30.11 trillion. The balance of notes issued by BOJ grew 2.7% y-o-y to JPY79.12 trillion.
Indonesia's Economy Expands 6.5% in 2Q11;Indonesia and Malaysia Report Trade Surpluses; Singapore's PMI Falls to 49.3 in July 
........................................................................................................................................
Indonesia's economy expanded 6.5% y-o-y in 2Q11, growing at the same pace it did in 1Q11, on the back of strongexports and investment. Exports grew 17.4% y-o-y in 2Q11 compared with a 12.3% expansion in 1Q11, whileinvestment rose 9.2% y-o-y from 7.3% growth in 1Q11. Also, household spending and government spending postedstrong growth in 2Q11, rising 4.6% and 4.5% y-o-y, respectively. On a quarter-on-quarter basis, gross domestic product(GDP) growth was reported at 2.9%, up from 1.5% in 1Q11.
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………………………………………………………………………………………………………………………..……….………………………………………………………………………………………………………………………..….......
asianbondsonline.adb.org 
EBT HIGHLIGHTS
 ASIANBONDSONLINE
 
Summary Text of News ArticlesIndonesia's Economy Expands 6.5% in 2Q11;Indonesia and Malaysia Report Trade Surpluses; Singapore's PMI Falls to 49.3 in July (cont…)
........................................................................................................................................
Exports from Indonesia grew 49.3% y-o-y to USD18.4 billion in June after rising 44.9% in May. Growth in imports,however, eased to 28.3% y-o-y in June, following revised 48.6% annual growth in May. A trade surplus amounting toUSD3.3 billion was recorded in June, down slightly from USD3.5 billion in May.In Malaysia, export growth rose to 8.6% y-o-y in June from 5.4% in May. Meanwhile, imports grew 6.3% y-o-y in June,compared with 9.4% growth posted in the previous month. On a m-o-m basis, exports and imports expanded 4.1% and6.8%, respectively. During the first half of the year, total exports increased 6.6% to MYR336.6 billion and total importsrose 9.6% to MYR277.7 billion. In January-June, Malaysia's trade surplus stood at MYR58.9 billion.Meanwhile, Singapore's purchasing managers' index (PMI) fell to 49.3 in July, after posting 50.4 in June, due to aslowdown in global manufacturing, according to data released by the Singapore Institute of Purchasing and MaterialsManagement. Singapore's manufacturing activity contracted for the first time in 10 months due to a drop in new exportorders and lower inventory levels. A PMI reading above 50 indicates an expansion in manufacturing activity, while areading below 50 indicates a contraction.
Republic of Korea's ABS Issuance Soars 34.1% y-o-y in 1H11,Net Foreign Investment in LCY Bonds Climbs to KRW2.9 Trillion in July 
........................................................................................................................................
Asset-backed securities (ABS) issuance in the Republic of Korea soared 34.1% year-on-year (y-o-y) to KRW14.7 trillionin 1H11, based on Financial Supervisory Service (FSS) data. The increase was driven by Korea Housing FinanceCorporation's issuance of mortgage-backed securities, which grew 59.1% y-o-y to KRW4.3 trillion in 1H11, as well as arise in overseas ABS issuance by credit card companies, which surged 830.7% y-o-y to KRW2.1 trillion in 1H11.Net foreign investment flows into LCY-denominated bonds in the Republic of Korea stood at KRW2.9 trillion in July, upfrom June's KRW2.2 trillion and the highest monthly figure in the first 7 months of the year. Thai-based investors wereresponsible for the largest net bond investment inflows of KRW2.1, followed by investors from Singapore with net bondinvestments of KRW604.1 billion. In contrast, the largest net bond investment outflows were generated by investors inFrance, amounting to KRW568.1 billion. The FSS has attributed the high level of foreign investment in bonds toattractive yields-due to expected currency appreciation-and the relative preference for safe assets amid sovereign debtproblems in Europe and the United States (US).
Philippines Posts PHP17.2 Billion Budget Deficit in 1H11
........................................................................................................................................
The Philippines incurred a budget deficit of PHP17.2 billion in 1H11, a significant improvement from the programmedamount of PHP152.1 billion, as the government limited spending at the same time revenue collections by the Bureau ofInternal Revenues (BIR) improved. The national government posted a fiscal deficit of PHP7.7 billion in June. In 1H11,BIR revenues grew to PHP458 billion, up 13.5% from the same period in the previous year. Meanwhile, the collectionsof the Bureau of Customs (BOC) fell 1.7% y-o-y to PHP128.6 billion. Excluding interest payments on debt, theexpenditures of the national government shrank 12.1% y-o-y in 1H11 to PHP564.4 billion from PHP642.1 billion in1H10. Interest payments also dropped 8.3% y-o-y to PHP134.5 billion. The Philippines' 2011 target deficit-to-grossdomestic product (GDP) ratio is 3.2%, or roughly PHP304 billion.
Issuances in the PRC; Hong Kong, China; Indonesia; Republic of Korea; and Malaysia
........................................................................................................................................
China Resources Land issued USD250 million worth of 5-year senior notes last week. The notes carried a coupon of4.625% and the proceeds of the notes will be used to fund working capital and projects.In Hong Kong, China, the government issued 10-year Hong Kong Special Administrative Region (HKSAR) governmentbonds under the Institutional Bond Issuance Programme. The issue size was HKD2.5 billion and the bonds carried acoupon of 2.46%.
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