19 November 2012 asianbondsonline.adb.org ……………………………………………………………………………………………………………..……………..…… Key Developments in Asian Local Currency Markets 1 Asia Bond Monitor September 2012 read more 10-Year Selected LCY Government Security Yields Close of 16 November 2012 basis point change from Markets Latest Closing Previous Day* Previous Week* 1-Jan-12* Selected Benchmark Yield Curves — Local Currency Government Policy Rate versus Inflation Rate Charts Government Security Yields Credit Default Swap Spreads and Exchange Rate Indexes Selected Debt Security Issuances Selected Asia Data Releases 2- versus 10- Year Yield Spread Chart he gross domestic product (GDP) of Japan shrank at an annualized rate of 3.5% in 3Q12 - equivalent to 0.1% year-on-year (y-o-y) growth - as exports tumbled and consumer spending slumped on the back of the global economic slowdown. Singapore's 3Q12 GDP was revised to rise modestly at 0.8% y-o-y - lower than the 1.3% preliminary estimate. Singapore's economy is forecasted to expand 1.5% in 2012 and 1%-3% in 2013. Malaysia's GDP eased 5.2% y-o-y in 3Q12 versus the revised 5.6% recorded in 2Q12. Hong Kong, China's GDP grew 1.3% y-o-y in 3Q12, similar to 2Q12's 1.2% growth. Lastly, Thailand's GDP grew 3.0% y-o-y in 3Q12 from 4.4% in 2Q12. According to People's Bank of China (PBOC) Governor Zhou Xiaochun, the PBOC is concerned about inflation in the People's Republic of China (PRC) and that the PBOC must continually be on guard. Singapore's retail sales growth slowed to 2.5% y-o-y in September due to lower-than- expected sales growth in vehicles and luxury goods. Factory output in the Philippines grew 8.0% y-o-y in September. Japan's industrial production fell 4.1% y-o-y in September. Growth in personal remittances from overseas Filipinos eased to 6.0% y-o-y in September. Growth in cash remittances likewise slowed to 5.9% y-o-y in September. Foreign direct investment (FDI) in the Philippines fell 82.9% y-o-y to US$13 million in August. Philippine export growth jumped 22.8% y-o-y in September to US$4.8 billion as electronics products recovered. Singapore's non-oil domestic exports (NODX) posted a 7.9% y-o-y increase in October. Malaysia current account surplus slightly narrowed to MYR9.5 billion 3Q12. In October, the Hong Kong Monetary Authority (HKMA) increased the size of the Exchange Fund by HKD18.1 billion to HKD2.3 trillion, and also increased the monetary base by HKD78.0 billion to HKD1.1 trillion. On 13 November, the Japan Credit Rating Agency (JCR) affirmed Indonesia's sovereign credit rating at BBB- with a stable outlook. Last week, property developer Gemdale in the PRC priced its debut US$350 million 5-year bond callable in 3 years at a yield of 7.125%. Malaysia's Imtiaz Sukuk Berhad raised MYR1.0 billion from the sale of dual-tranche sukuk. Viet Nam Development Bank last week sold triple- tranche government-backed bonds worth VND1.2 trillion with coupons ranging between 10.5% and 10.8%. The government of Indonesia sold US$1 billion of 10-year US-dollar sukuk at 3.30%. Export-Import Bank of Korea sold US$1 billion 3-year US-dollar bond with coupon of 1.25% to yield 1.31%. Government bond yields fell last week for all tenors in the PRC and the Republic of Korea, and for most tenors in Hong Kong, China; Indonesia; Malaysia; the Philippines; and Viet Nam. Yields rose for most tenors in Thailand, and was unchanged for most tenors in Singapore. Yield spreads between 2- and 10- year maturities widened in Indonesia, the Philippines and Thailand, while spreads remained unchanged in the Republic of Korea and narrowed in most other emerging East Asian markets. Watch out for the release of the latest issue of the Asia Bond Monitor, which will be launched on 22 November in Jakarta at the Developing Local Corporate Debt Markets Conference at Sumba B, Third Level Hotel Borobudur. Please confirm your participation through email at [email protected]. T US 1.58 -1.28 -2.63 -29.62 EU 1.33 -0.70 -1.70 -49.80 Japan 0.73 -0.90 -0.80 -25.80 PRC 3.53 -1.00 -5.00 9.00 Hong Kong, China 0.51 -0.10 -2.30 -95.40 India 8.19 0.40 -2.10 -37.30 Indonesia 5.40 0.00 -15.60 -63.20 Korea, Rep. of 2.96 -1.00 -2.00 -83.00 Malaysia 3.45 -0.40 -0.40 -24.80 Philippines 4.58 2.33 -2.85 -50.89 Singapore 1.31 -1.00 -1.00 -32.00 Thailand 3.44 -1.90 6.90 14.80 Viet Nam 10.10 0.00 -26.70 -240.00 -2.63 -1.70 -0.80 -5.00 -2.30 -2.10 -15.60 -2.00 -0.40 -2.85 -1.00 6.90 -26.70
Selected Benchmark Yield Curves — Local Currency Government
Policy Rate versus Inflation Rate Charts
Government Security Yields
Credit Default Swap Spreads and Exchange Rate IndexesSelected Debt Security Issuances Selected Asia Data Releases
2- versus 10- Year Yield Spread Chart
he gross domestic product (GDP) of Japan shrank at an annualized rate of 3.5% in 3Q12 - equivalent to 0.1% year-on-year (y-o-y) growth - as exports tumbled and consumer spending slumped on the back of the global economic slowdown. Singapore's 3Q12 GDP was revised to rise modestly at 0.8% y-o-y - lower than the 1.3% preliminary estimate. Singapore's economy is forecasted to expand 1.5% in 2012 and 1%-3% in 2013. Malaysia's
GDP eased 5.2% y-o-y in 3Q12 versus the revised 5.6% recorded in 2Q12. Hong Kong, China's GDP grew 1.3% y-o-y in 3Q12, similar to 2Q12's 1.2% growth. Lastly, Thailand's GDP grew 3.0% y-o-y in 3Q12 from 4.4% in 2Q12.
According to People's Bank of China (PBOC) Governor Zhou Xiaochun, the PBOC is concerned about inflation in the People's Republic of China (PRC) and that the PBOC must continually be on guard.
Singapore's retail sales growth slowed to 2.5% y-o-y in September due to lower-than-expected sales growth in vehicles and luxury goods. Factory output in the Philippines grew 8.0% y-o-y in September. Japan's industrial production fell 4.1% y-o-y in September.
Growth in personal remittances from overseas Filipinos eased to 6.0% y-o-y in September. Growth in cash remittances likewise slowed to 5.9% y-o-y in September. Foreign direct investment (FDI) in the Philippines fell 82.9% y-o-y to US$13 million in August.
Philippine export growth jumped 22.8% y-o-y in September to US$4.8 billion as electronics products recovered. Singapore's non-oil domestic exports (NODX) posted a 7.9% y-o-y increase in October. Malaysia current account surplus slightly narrowed to MYR9.5 billion 3Q12.
In October, the Hong Kong Monetary Authority (HKMA) increased the size of the Exchange Fund by HKD18.1 billion to HKD2.3 trillion, and also increased the monetary base by HKD78.0 billion to HKD1.1 trillion.
On 13 November, the Japan Credit Rating Agency (JCR) affirmed Indonesia's sovereign credit rating at BBB- with a stable outlook.
Last week, property developer Gemdale in the PRC priced its debut US$350 million 5-year bond callable in 3 years at a yield of 7.125%. Malaysia's Imtiaz Sukuk Berhad raised MYR1.0 billion from the sale of dual-tranche sukuk. Viet Nam Development Bank last week sold triple-tranche government-backed bonds worth VND1.2 trillion with coupons ranging between
10.5% and 10.8%. The government of Indonesia sold US$1 billion of 10-year US-dollar sukuk at 3.30%. Export-Import Bank of Korea sold US$1 billion 3-year US-dollar bond with coupon of 1.25% to yield 1.31%.
Government bond yields fell last week for all tenors in the PRC and the Republic of Korea, and for most tenors in Hong Kong, China; Indonesia; Malaysia; the Philippines; and Viet Nam. Yields rose for most tenors in Thailand, and was unchanged for most tenors in Singapore. Yield spreads between 2- and 10- year maturities widened in Indonesia, the Philippines and Thailand, while spreads remained unchanged in the Republic of Korea and narrowed in most other emerging East Asian markets.
Watch out for the release of the latest issue of the Asia Bond Monitor, which will be launched on 22 November in Jakarta at the Developing Local Corporate Debt Markets Conference at Sumba B, Third Level Hotel Borobudur. Please confirm your participation through email at [email protected].
Japan's Economy Shrinks at an Annualized Rate of 3.5% in 3Q12; Singapore's Revised 3Q12 GDP Shows Growth of 0.8% y-o-y;
Malaysia's Economy Expands 5.2% Y-o-Y in 3Q12; Hong Kong, China's Economy Grows Steady in 3Q12 .......................................................................................................................
Japan's economy shrank in 3Q12 as exports tumbled and consumer spending slumped due to strained relations with the People's Republic of China (PRC) and the global economic slowdown. Japan's gross domestic product (GDP) contracted at an annualized rate of -3.5% in July-September and -0.9% on a quarter-on-quarter (q-o-q) basis. On a year-on-year (y-o-y) basis, GDP growth eased to 0.1% in 3Q12 from 3.3% in 2Q12. Exports fell 5.0% q-o-q in 3Q12 following an uptick of 1.3% in 2Q12. Private demand continued to decline at a rate of -0.6% q-o-q in 3Q12 from -0.1% in the previous quarter.
According to final data released by the Ministry of Trade and Industry (MTI) on 16 November, Singapore's GDP grew 0.8% y-o-y in 3Q12, lower than the 1.3% preliminary estimate and the 2.5% growth posted in the previous quarter. The manufacturing sector posted a revised 0.8% y-o-y contraction in 3Q12, the construction sector grew 7.7%, and the services sector posted growth of only 0.3%. MTI expects Singapore's GDP to grow around 1.5% in 2012 and between 1.0% and 3.0% in 2013.
During the third quarter of 2012, Malaysia's real GDP grew 5.2% y-o-y, slightly lower than the revised 5.6% growth in the second quarter. Domestic demand buoyed Malaysia's economy as weakness in the global economy persists. Aggregate domestic demand growth eased to 7.3% y-o-y in 3Q12 from a revised 9.2% growth in 2Q12, due to lower growths of private and public consumption. Private consumption growth slightly eased to 8.5% y-o-y in 3Q12 from 8.8 in 2Q12, while public consumption growth slowed to 2.2% y-o-y in 3Q12 from 10.5% in the previous quarter. Capital spending continued to post double digit growth at 22.7% y-o-y, with private and public sectors registering 22.9% and 22.4% y-o-y growths, respectively. On the supply side, growth of the construction sector slowed to 18.3% y-o-y in 3Q12 from 22.2% in 2Q12. Manufacturing sector growth eased to 3.3% y-o-y in 3Q12 from 5.6% in the previous quarter. Mining sector shrank 1.2% y-o-y during the third quarter, after posting a 2.3% growth in the previous quarter. Meanwhile, services and agriculture sectors improved as the former increased 7.0% y-o-y in 3Q12 from 6.6% in 2Q12, while the latter posted 0.5% growth in 3Q12 after posting 4.7% decline in 2Q12.
Hong Kong, China's GDP grew 1.3% y-o-y in 3Q12, similar to 2Q12's 1.2% growth. Low growth rate in 3Q12 was attributed mainly to weak demand in the external markets. Exports of goods grew 4% y-o-y in real terms in 3Q12, aided by a low base, versus a 0.2% decline in 2Q12. However, exports of services grew only 0.1% y-o-y from 2.9% in 2Q12 due to lower cross-border financial activity and trade flows. Domestic demand grew 2.8% y-o-y in 3Q12.
For statistics on Japan's real GDP growth, refer to this link: http://asianbondsonline.adb.org/japan/data/macroeconomic_credit.php
For statistics on Malaysia's real GDP growth, refer to this link: http://asianbondsonline.adb.org/malaysia/data/macroeconomic_credit.php
For statistics on Singapore's real GDP growth, refer to this link: http://asianbondsonline.adb.org/singapore/data/macroeconomic_credit.php
For statistics on Hong Kong, China's real GDP growth, refer to this link: http://asianbondsonline.adb.org/hongkong/data/macroeconomic_credit.php
Retail Sales Growth Slows in Singapore in September; Factory Output in the Philippines Climbs in September;
Revised Industrial Production in Japan Falls in September ....................................................................................................................... Singapore's retail sales growth slowed in September to 2.5% y-o-y from a revised 3.3% in August, due to lower-than-expected growth in sales of vehicles and luxury goods, which slowed to 2.4% and 2.8%, respectively. In contrast, sales of food and beverage services rose 3.7% y-o-y in September.
Retail Sales Growth Slows in Singapore in September; Factory Output in the Philippines Climbs in September;
Revised Industrial Production in Japan Falls in September (cont…) ....................................................................................................................... Factory output in the Philippines grew 8.0% y-o-y in September, up from 4.4% posted in August. This was attributed to the expansion in production output observed in 10 major sectors, with double-digit increases reported for transport equipment (28.5%), footwear and wearing apparel (27.7%), machinery except electrical (27.4%), wood and wood products (21.4%), basic metals (18.8%), electrical machinery (15.7%), food manufacturing (14.3%), and chemical products (11.1%). Factory output also showed month-on-month (m-o-m) growth of 1.4% in September from -0.2% in August. Twelve major sectors reported double-digit output growth on a m-o-m basis: beverages (21.2%), leather products (21.2%), and basic metals (19.2%).
The revised report for industrial production growth in Japan logged a contraction of 4.1% y-o-y in September, similar to what was previously reported. However, this was an improvement from -8.1% growth recorded in August. The weakness in industrial production underscored the need for fiscal and monetary stimulus to avert the risk of recession.
For statistics on Singapore's retail sales growth, refer to this link: http://asianbondsonline.adb.org/singapore/data/macroeconomic_credit.php
For statistics on Japan's industrial production, refer to this link: http://asianbondsonline.adb.org/japan/data/macroeconomic_credit.php
Growth in Philippine Remittances Slows to 6.0% y-o-y in September, FDI Shrinks 82.9% y-o-y in August ....................................................................................................................... Growth in personal remittances from overseas Filipinos eased to 6.0% y-o-y in September from 7.9% in August, totaling US$2.0 billion for the month. Growth in cash remittances slowed to 5.9% y-o-y in September from 7.6% in August. This brought January-September growth to 5.7% and 5.5% y-o-y for personal and cash remittances, respectively. Remittances remained resilient on the back of sustained foreign demand for skilled Filipino manpower and the continued financial services innovations of banks and other financial institutions. Increased transfers from overseas Filipinos were also likely in response to property damage caused by heavy seasonal rains and a typhoon that affected the country in August.
Foreign direct investment (FDI) in the Philippines shrank in August due to risk aversion emanating from weak global economic prospects and financial strains in the advanced economies. FDI fell 82.9% y-o-y to US$13 million in August from US$76 million a year earlier. Net inflows for the month consisted mainly of equity capital, which rose 35.5% y-o-y to reach US$42 million. Gross placements of equity capital-largely from the United States (US), Macau, and Japan-were invested in the real estate, transportation and storage, and manufacturing sectors. Reinvested earnings likewise registered net inflows of US$16 million. However, these inflows were offset by higher net outflows in the other capital account amounting to US$45 million as local branches of foreign banks remitted profits to their head offices abroad. FDI in January-August rose 61.2% y-o-y to reach US$1 billion. The surge in FDI was led by a net infusion of equity capital amounting to US$1.1 billion that was invested in the manufacturing, real estate, wholesale and retail, finance and insurance, and mining and quarrying sectors. The bulk of these investments originated from the US, Australia, the Netherlands, the United Kingdom, Japan, and Bermuda.
For statistics on worker remittances and FDI in the Philippines, refer to this link: http://asianbondsonline.adb.org/philippines/data/macroeconomic_credit.php
Philippine Exports Surge 22.8% y-o-y in September; Singapore's NODX Rise7.9% y-o-y in October; Malaysia's Current Account Surplus Slightly Narrows .......................................................................................................................
Export growth in the Philippines jumped 22.8% y-o-y in September to US$4.8 billion, boosted by a recovery in electronics products, which managed to expand 1.1% y-o-y in September after declining 19.7% in August. Aside from electronics, other top export products were (i) woodcrafts and furniture, (ii) metal components, (iii) ignition wiring sets, and (iv) articles of apparel and clothing accessories. The Philippines' top export destinations were Japan; the US; the PRC; Hong Kong, China; and Singapore.
Philippine Exports Surge 22.8% y-o-y in September; Singapore's NODX Rise7.9% y-o-y in October;
Malaysia's Current Account Surplus Slightly Narrows (cont…) ....................................................................................................................... Singapore's non-oil domestic exports (NODX) posted a 7.9% y-o-y increase in October, higher than the 3.6% growth posted in September. An 0.8% drop in electronics exports was offset by a 12.7% increase in non-electronics shipments. The rise in non-electronics exports was led by structures of ships and boats, non-monetary gold, and electrical circuit apparatus, which grew 148.1%, 108.3%, and 37.9%, respectively. The top three contributors to higher NODX in October were Hong Kong, China (up 53%); Taipei,China (31%); and Republic of South Korea (25%). However, on a m-o-m and seasonally adjusted basis, NODX fell 2.6% in October following a 3.2% contraction in September.
Malaysia's current account surplus slightly narrowed to MYR9.5 billion 3Q12 from MYR9.6 billion in the previous quarter, due to lower surplus in the goods account and higher current transfers net payments. Total exports reached MYR174.4 billion in 3Q12, lower than the MYR177.7 billion posted in 2Q12, due to lower exports of crude petroleum, palm oil & palm oil based products and rubber products. Meanwhile, total imports slightly increased to MYR148.9 billion in 3Q12 from MYR148.2 billion in 2Q12.
For statistics on the Philippines' exports growth, refer to this link: http://asianbondsonline.adb.org/philippines/data/macroeconomic_credit.php
For statistics on Malaysia's current account, refer to this link: http://asianbondsonline.adb.org/malaysia/data/macroeconomic_credit.php
Hong Kong, China Increases Exchange Fund Assets and Monetary Base ....................................................................................................................... According to the Hong Kong Monetary Authority (HKMA), the size of the Exchange Fund rose by HKD18.1 billion to HKD2.3 trillion in October. Hong Kong, China's monetary base-which includes Certificates of Indebtedness, government-issued currency notes and coins in circulation, and the aggregate balance and Exchange Fund Bills and Notes (EFBNs)-increased by HKD78.0 billion to HKD1.1 trillion.
JCR Affirms Indonesia's Sovereign Ratings at BBB- ....................................................................................................................... On 13 November, the Japan Credit Rating Agency (JCR) affirmed Indonesia's sovereign credit rating at BBB- with a stable outlook. JCR cited the following key factors in its decision to affirm Indonesia's ratings: (i) the country's sustainable economic growth outlook, (ii) a low level of public debt burden, and (iii) a reinforced resilience to external shocks.
Gemdale Issues Debut US Dollar Bond; Imtiaz Sukuk Berhad Raises MYR1 Billion Sukuk; VDB Sells VND1.2 Trillion Government-Backed Bonds .......................................................................................................................
Gemdale, a property developer from the PRC, priced its debut US$350 million 5-year bond last week, callable in 3 years at a yield of 7.125%. Of the total, 89% of the orders came from Asia. The bond is rated Ba3 by Moody's and BB- from S&P.
In Malaysia, Imtiaz Sukuk Berhad, a trust-owned entity set up as a funding conduit for Bank Kerjasama Rakyat Malaysia Berhad, raised MYR1 billion from the sale of dual-tranche Islamic medium-term notes (IMTNs) last week. The MYR300 million 3-year tranche carries a profit rate of 3.88% per annum, while the larger MYR700 million 5-year tranche pays 4.08% per annum. The issuance was rated AA2 by RAM Ratings.
Viet Nam Development Bank (VDB) last week sold VND1.2 trillion worth of government-backed bonds, or 40% of the offered value. The issue was composed of VND600 billion worth of 2-year bonds at 10.5%; VND500 billion worth of 3-year bonds at 10.6%; and VND100 billion 5-year bonds at 10.8%.
Viet Nam’s consumer price inf lation accelerated to 7.0% y-o-y in October from 6.5% in September after easing for 12 straight months.
The Philippines’ gross domestic product (GDP) performed strongly in the f irst half of 2012, expanding 6.3% and 5.9% y-o-y in 1Q12 and 2Q12, respectively.
Japan recorded a merchandise trade deficit of JPY561.7 billion in September from JPY763.8 billion in August.
Japan’s All-Industry Activity Index show ed a marginal gain of 0.1% month-on-month (m-o-m) in August follow ing a decline of 0.6% in July.
The Bank of Japan (BOJ) expanded its asset purchase program in its last tw o policy meetings—the latest increase w as JPY11 trillion—w hile maintaining the uncollateralized overnight call rate (target rate) at 0.1%.
Tip: Click on link to open a new browser (Acrobat Reader 8); for older versions right-click to open a new browser)
News Articles: Sources for Further Reading
Japan’s Economy Shrinks at an Annualized Rate of 3.5% in 3Q12; Singapore’s Revised 3Q12 GDP Shows Growth of 0.8% y-o-y; Malaysia’s Economy Expands 5.2% Y-o-Y in 3Q12; Hong Kong, China’s Economy Grows Steady in 3Q12
• Development of Real GDP (Quarterly), seasonally adjusted series
Cabinet Office (Japan) (12 November 2012)
• MTI Forecasts Growth of Around 1.5 Per Cent in 2012 and 1.0 to 3.0 Per Cent in 2013
Ministry of Trade and Industry (16 November 2012)
• Economic and Financial Developments in the Malaysian Economy in the Third Quarter of 2012
Bank Negara Malaysia (16 November 2012)
• Economic situation in the third quarter of 2012 and latest GDP and price forecasts for 2012 (with photo/video)
Census and Statistics Department (17 November 2012)
Retail Sales Growth Slows in Singapore in September; Factory Output in the Philippines Climbs in September; Revised Industrial Production in Japan Falls in September
• Singapore's retail sales grow 2.5% in Sept Channel News Asia (15 November 2012)
• Monthly Integrated Survey of Selected Industries: September 2012 National Statistics Office (15 November 2012)
• Indices of Industrial Production Ministry of Economy Trade and Industry (13 November 2012)
Growth in Philippine Remittances Slows to 6.0% y-o-y in September, FDI Shrinks 82.9% y-o-y in August
• Personal Remittances Continue to Rise in September Bangko Sentral ng Pilipinas (15 November 2012)
• Foreign Direct Investments Post US$1 billion Net Inflows in First Eight Months of 2012
Bangko Sentral ng Pilipinas (12 November 2012)
Philippine Exports Surge 22.8% y-o-y in September; Singapore’s NODX Rise7.9% y-o-y in October; Malaysia’s Current Account Surplus Slightly Narrows
• MERCHANDISE EXPORT PERFORMANCE* September 2012 (Preliminary)
National Statistics Office (13 November 2012)
• Singapore's External Trade - October 2012 International Enterprise Singapore (16 November 2012)
• Balance of Payments Third Quarter 2012 Department of Statistics Malaysia (16 November 2012)
Hong Kong, China Increases Exchange Fund Assets and Monetary Base
• Analytical Accounts of the Exchange Fund Hong Kong Monetary Authority (14 November 2012)
JCR Affirms Indonesia’s Sovereign Ratings at BBB-
• Japan Credit Rating Agency, Ltd. (JCR) Affirmed Indonesia Sovereign Rating
Bank Indonesia (13 November 2012)
Gemdale Issues Debut US Dollar Bond; Imtiaz Sukuk Berhad Raises MYR1 Billion Sukuk; Viet Nam Development Bank Sells VND 1.2 Trillion Government-Backed Bonds
• BONDS: Gemdale prices debut US-dollar issue in shaky market IFRAsia (13 November 2012)
• VDB Sells VND1.2Tln Government-Backed Bonds on Nov 16 Stoxplus (19 November 2012)
…………………………………………………………………………………………………………………………………
Disclaimer: AsianBondsOnline Newsletter is available to users free of charge. ADB provides no warranty or undertaking of any kind with respect to the information and materials found on, or linked to, the AsianBondsOnline Newsletter. ADB accepts no responsibility for the accuracy of the material posted or linked to in the publication, or the information contained therein, or for any consequences arising from its use, and does not invite or accept reliance being placed on any material or information so provided. Views expressed in articles marked with AsianBondsOnline are those of the authors and not ADB. This disclaimer does not derogate from, and is in addition to, the general terms and conditions regarding the use of the AsianBondsOnline website, which also apply.
