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Monday, May 30, 2011

Asian Bonds Online Newsletter (30 May 2011)

News Highlights - Week of 23 - 27 May 2011

Consumer price inflation accelerated in Hong Kong, China; Japan; and Viet Nam last week; while it eased in Singapore. In Hong Kong, China, inflation rose to 4.6% year-on-year (y-o-y) in April from 4.4% in March on the back of escalating food and housing rental prices. In Japan, headline inflation rose for the first time in 28 months in April-to 0.3% y-o-y-while inflation excluding fresh food climbed to 0.6%. Viet Nam's inflation rate surged to 19.8% y-o-y in May, compared with 17.5% in April, largely due to relatively high price spikes in food and housing costs. In contrast, Singapore's consumer price inflation rate eased to 4.5% y-o-y in April from 5.0% in March. 

* The current account surplus of the People's Republic of China (PRC) narrowed by 18.0% y-o-y to USD29.8 billion in 1Q11, while it widened in the Republic of Korea to USD1.9 billion in April from USD1.3 billion in March. 

* Hong Kong, China posted a merchandise trade deficit of HKD42.4 billion in April as merchandise export growth of 4.1% y-o-y was outpaced by merchandise import growth of 6.1%. Japan recorded a trade deficit of JPY463.7 billion in April due to a 12.5% y-o-y drop in exports and an 8.9% rise in imports. In the Philippines, merchandise import growth eased to 21.2% y-o-y in March from 21.9% in February, and the country recorded a trade deficit of USD3.4 billion in 1Q11. 

* Thailand's real GDP grew 3.0% y-o-y in 1Q11, mainly on the back of strong growth in exports, private investment, and tourism, but manufacturing output fell 7.8% y-o-y in April. The Philippines real GDP growth eased to 4.9% y-o-y in 1Q11 from 7.1% in 4Q10. Viet Nam's industrial production expanded 14.2% y-o-y in May. 

* The Philippines posted a fiscal surplus in April of PHP26.3 billion-the highest monthly surplus in the past 25 years-bringing the cumulative fiscal balance in January-April to a surplus of PHP61 million. Revenue collection rose 11.1% y-o-y in April to PHP138.3 billion, while government expenditures declined 8.0% to PHP112.1 billion. The Republic of Korea's fiscal deficit narrowed to KRW4.4 trillion in 1Q11. Meanwhile, Fitch Ratings revised Japan's outlook to negative from stable last week. 

* The Republic of Korea's external debt rose 6.1% quarter-on-quarter (q-o-q) to USD381.9 billion at end-March-led by an 8.7% rise in short-term external debt. Meanwhile, household loans climbed 8.0% y-o-y to KRW752.3 trillion at end-March. 

* The Korea Development Bank issued a THB3 billion 3-year bond at 3.88% last week. The state-owned Expressway Authority of Thailand issued a THB1 billion 10-year bond at 3.81%, and Thitikorn priced its THB500 million 5-year senior bond at 3.92% for the first 3 years with an increase to 5.00% in the remaining 2 years. In Viet Nam, Sacombank Securities Joint Stock issued a VND185 billion 1-year floating rate bond with a coupon to be reset quarterly. 

* Government bond yields fell last week for most tenors in Hong Kong, China; the Republic of Korea; and the Philippines, while yields rose for most tenors in Indonesia, Malaysia, Thailand and Viet Nam. Yield movements were mixed in the PRC and Singapore. Yield spreads between 2- and 10- year tenors widened in Malaysia and Viet Nam, while spreads narrowed in most other emerging East Asian markets.


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