asia - weekly debt highlights

8/3/2019 Asia - Weekly Debt Highlights

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5 December 2011 asianbondsonline.adb.org

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Key Developments in Asian Local Currency Markets

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onsumer price inflation in Indonesia eased for a third consecutive month in November to 4.15% year-on-year (y-o-y) compared with 4.42% in October. In the Republic of Korea consumer price inflation accelerated to 4.2% y-o-yin November from 3.6% in October on the back of price hikes in food, transportation, and utilities. In Thailandconsumer price inflation stood at 4.19% y-o-y in November, the same rate as in October.

The People's Bank of China announced lastweek that it will reduce the reserve requirementratio of banks by 50 basis points (bps) effective5 December. The Philippines held steady itspolicy rates last week, while the Bank ofThailand decided to lower its policy interest rateby 25 bps to 3.25%.

Philippine real GDP growth eased to 3.2%y-o-y in 3Q11 from 3.4% in the previousquarter. The purchasing managers' index (PMI)

for the People's Republic of China's (PRC)manufacturing sector fell to 49.0 in Novemberfrom 50.4 in October. Industrial production inthe Republic of Korea grew 6.2% y-o-y inOctober, while contracting 35.8% y-o-y inThailand. Japan's industrial production rose2.4% month-on-month (m-o-m) in October.

The Republic of Korea's current accountsurplus widened to US$4.2 billion in October,the largest surplus position since November2010. In contrast, Thailand's current accountsurplus shrank to US$39 million in October.

Indonesia's export growth stood at 16.7% y-o-y in October, compared with 44.0% annualgrowth in September. The Republic of Korea'sannual export growth accelerated to 13.8% inNovember from 8.0% in October.

Last week, Shenzhen raised CNY2.2 billionfrom a dual-tranche local government bondsale; ICBC issued US$750 million worth of 10-year bonds; Hyundai Motors priced US$500million worth of 5.5-year bonds; BMW Australiasold CNH400 million of 1-year bonds in HongKong, China; Anih Berhad-a Malaysian toll roadoperator-raised MYR2.5 billion from a multi-

tranche Islamic medium-term note sale; andMalaysian holding company DRB-HICOMraised MYR500 million from a dual-tranchesukuk (Islamic bonds) sale. LCY corporatebond issuance in the Republic of Korea surged20.3% m-o-m in October.

Last week, Pefindoan Indonesian ratingagencyannounced plans of the localgovernments of Jakarta and Makassar to issue

municipal bonds. Separately, the Indonesian government plans to offerretail sukuk by March 2012. In the Philippines, Security Bank plans toissue up to PHP5 billion of long-term negotiable certificates of timedeposit.

Bank Negara Malaysia and the Monetary Authority of Singaporesigned a Memorandum of Understanding last week to enhance theliquidity of financial institutions in both countries and strengthencooperation in carrying out domestic liquidity management.

Government bond yields fell last week for all tenors in Indonesiaand Thailand, and for most tenors in the PRC, Republic of Korea,

Malaysia, and the Philippines. Yields rose for most tenors in HongKong, China; Singapore; and Viet Nam. Yield spreads between 2- and10-year tenors widened in the PRC; Hong Kong, China; Republic ofKorea; Singapore; Thailand; and Viet Nam, while spreads narrowed inIndonesia, Malaysia, and the Philippines.

What's New:Last week the results of our 2011 Asia Bond MarketSurvey were attached to our quarterly Asia Bond Monitor. This weekwe are sending out the survey to our AsianBondsOnlinedistribution listas a separate document.

CAsia Bond Monitor November 2011

10-Year Selected LCY Government Security Yields Close of 2 December 2011basis point change from

Previous Day*Markets Latest Closing Previous Week* 1-Jan-11*US 2.03 -5.42 6.96 -126.04

EU 2.14 -4.30 -12.80 -82.80

Japan 1.04 -2.10 1.60 -8.40

PRC 3.49 -8.00 -14.00 -42.00

ong Kong, China 1.35 -0.70 8.30 -150.50

dia 8.67 -3.00 -15.10 75.30

H

InIndones ia 6.23 -14.40 -66.50 -137.60

Malays ia 3.72 0.00 -2.40 -31.60

Korea, Rep. of 3.79 -1.00 -1.00 -73.00

Philippines 5.59 0.53 -9.40 -29.57

Singapore 1.73 4.00 6.00 -98.00

Thailand 3.29 -5.00 -12.90 -43.40

Viet Nam 12.88 26.20 19.20 112.50

6.96

-12.80

1.60

-66.50

-2.40

-1.00

-9.40

6.00

-12.90

19.20

-14.00

8.30

-15.10

Selected

Benchmark Yield Curves - Local Currency Government Bonds

Policy Rate versus Inflation Rate Charts

Government Security Yields

Credit Default Swap Spreads & Exchange Rate Indexes

Selected Debt Security IssuancesSelected Asia Data Releases

2-versus-10 Yield Spread Chart
http://asianbondsonline.adb.org/documents/abm_nov_2011.pdf?src=wdhhttp://asianbondsonline.adb.org/documents/abm_nov_2011.pdf?src=wdh


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EBTHIGHLIGHTSASIANBONDSONLINE

Summary Text of News Articles

Consumer Price Inflation Eases in Indonesia, Accelerates in Republic of Korea,

Remains Steady in Thailand in November

.......................................................................................................................Consumer price inflation in Indonesia eased for a third straight month in November to 4.15% year-on-year (y-o-y),compared with 4.42% in October, amid lower food price inflation. The November inflation figure was a 19-month lowand provides room for the central bank to keep its benchmark interest rate at low levels to ensure economic growth.Bank Indonesia's Board of Governors is scheduled to meet on 8 December. Consumer price inflation for January toNovember was 3.2%, well below the 5.65% target set by the government and the 4.0%-6.0% target of Bank Indonesia.

In the Republic of Korea consumer price inflation-based on the revised consumer price index (CPI) using 2010 as thebase year-accelerated to 4.2% y-o-y in November from 3.6% in October. The increase was accentuated by a 6.0% y-o-y hike in prices for food and non-alcoholic beverages. Transport costs also rose for the month, by 8.2% y-o-y, and theprice indices for clothing and footwear and housing and utilities increased 6.0% and 6.3% y-o-y, respectively. On amonth-on-month (m-o-m) basis, the CPI rose marginally by 0.1% in November.

Meanwhile, the government of the Republic of Korea launched a new CPI with 2010 as the base year in order to bettercapture the impact of recent economic and social changes in the country on price fluctuations.

In Thailand consumer price inflation stood at 4.19% y-o-y in November, the same rate as in October. Food pricescontinued their steady climb, rising 10.2% y-o-y for the month following a 9.9% increase in the previous month. Thiswas the eighth consecutive month for consumer price inflation to have exceeded 4.0% on a y-o-y basis. Consumerprices climbed 0.2% m-o-m in November.

For historical trends on inflation in Indonesia, refer to this link:http://asianbondsonline.adb.org/indonesia/data/marketwatch.php?code=policy_rate_and_inflation_trends

For inflation rate statistics in the Republic of Korea, refer to this link:http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php

For inflation rate statistics in Thailand, refer to this link:http://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php

PRC Cuts Reserve Requirement Ratio of Banks;Policy Rates Kept Unchanged in the Philippines, Lowered in Thailand

.......................................................................................................................The People's Bank of China (PBOC) announced last week that it will reduce the reserve requirement ratio of banks by50 basis points (bps) effective 5 December. For large commercial banks the new reserve requirement ratio is 21%. Thisis the first time in 3 years that the PBOC has lowered the reserve requirement ratio.

In the Philippines the Monetary Board of Bangko Sentral ng Pilipinas (BSP) decided to leave its policy rates unchangedlast week. The interest rates on term reverse repurchases, repurchases, and special deposit accounts were alsomaintained. The reserve requirement ratios remained unchanged as well. While subdued economic growth was takeninto account, BSP also took note of the upside risks to prices. BSP raised its average inflation forecast for the years2011, 2012, and 2013 from 4.46%, 3.05%, and 3.02%, respectively, to 4.52%, 3.51%, and 3.12%.

The Bank of Thailand's Monetary Policy Committee decided on 30 November to cut the policy interest rate-the 1-day

repurchase rate-by 25 bps to 3.25%. The Committee noted the increased risk of a global economic slowdown amid theeurozone's sovereign debt crisis and the United States' (US) fragile economic recovery. It took into account the adverseimpact of flooding on the domestic economy, with an expectation of slower economic growth for the fourth quarter andthe full year. Against this backdrop the accommodative monetary policy stance of the central bank will help supporteconomic restoration and reconstruction efforts, as well as support investment activity.

For policy rate trends in the Philippines, refer to this link:http://asianbondsonline.adb.org/philippines/data/marketwatch.php?code=policy_rate_and_inflation_trendsFor policy rate trends in Thailand, refer to this link:http://asianbondsonline.adb.org/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends

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http://asianbondsonline.adb.org/indonesia/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/indonesia/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/philippines/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/philippines/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/philippines/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/philippines/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/indonesia/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdh


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Philippine Real GDP Growth Eases to 3.2% y-o-y in 3Q11;

Manufacturing Activity Contracts in the PRC in November;

Industrial Output Grows in Japan and Republic of Korea, Contracts in Thailand in October.......................................................................................................................Real gross domestic product (GDP) growth in the Philippines eased to 3.2% y-o-y in 3Q11 from a revised 3.4% in2Q11. The slowdown in growth was attributed to the eurozone's debt crisis, still limited government spending, theimpact of tropical storms on the agricultural sector, and high oil prices. Growth for the quarter was buoyed primarily bythe services sector, which expanded 5.3% y-o-y, while agriculture, hunting, forestry, and fisheries grew 1.8% y-o-y.Cumulative GDP for the first 9 months of 2011 stood at 3.6% y-o-y, lower than the government's full-year target of 4.5%.

The People's Republic of China's (PRC) manufacturing activity dropped in November as indicated by a fall in themanufacturing purchasing managers' index (PMI). The PRC's manufacturing PMI fell to 49.0 from 50.4 in October. APMI reading below 50 indicates a contraction in manufacturing activity.

In Japan industrial production accelerated 2.4% m-o-m in October, reversing a drop of 3.3% m-o-m in September.Actual factory output beat expectations of a 1.2% m-o-m increase, supported by demand for automobiles. Thetransport, general machinery, and chemical (excluding drugs) sectors led gainers. In terms of commodities, large andsmall passenger cars and drive, transmission, and control parts posted the largest increases. The outlook for industrialproduction, however, is bleak as overseas demand is expected to slow.

Industrial output in the Republic of Korea grew 6.2% y-o-y in October, but was down 0.7% from the previous month.Manufacturing production growth slowed to 6.3% y-o-y in October from 7.1% in September largely due to weakergrowth in vehicle production.

Thailand's manufacturing production index plunged 35.8% y-o-y in October amid supply disruptions caused by theflooding. Among the sectors adversely affected by the flooding were the automobile, electrical appliance, and hard diskdrive and integrated circuits and parts industries.

For manufacturing production statistics in Thailand, refer to this link:http://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php

Current Account Surplus Widens in Republic of Korea, Narrows in Thailand in October.......................................................................................................................The Republic of Korea's current account surplus in October widened to US$4.2 billion, the largest surplus sinceNovember 2010. The increase was on the back of the goods account surplus rising to US$3.7 billion as the monthlydecline in merchandise imports outpaced that of merchandise exports. The primary income surplus also increased toUS$640 million in October from US$540 million in the previous month.

Thailand's current account surplus shrank to US$39 million in October from US$404 million in September. The declinein the country's surplus position was largely due to a marginal decline in export growth of 0.1% y-o-y coupled with20.6% y-o-y import growth.

For current account statistics in the Republic of Korea, refer to this link:http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php

For export growth and current account statistics in Thailand, refer to this link:

http://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php

Export Growth Slows in Indonesia in October, Accelerates in Republic of Korea in November.......................................................................................................................In Indonesia export growth stood at 16.7% y-o-y in October-with exports valued at US$16.8 billion-following revised44.0% annual growth in September. Non-oil and gas exports climbed 20.3% y-o-y while oil and gas exports grew at amuch slower pace of 1.9%. Import growth eased to 29.1% y-o-y in October after revised 57.1% growth a month earlier.A trade surplus of US$1.2 billion was recorded in October.

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http://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php&src=wdh


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Export Growth Slows in Indonesia in October, Accelerates in Republic of Korea in November (cont).......................................................................................................................The Republic of Korea's export growth rate for the month of November stood at 13.8% y-o-y, higher than October's

growth of 8.0%. Import growth weakened to 11.3% y-o-y for the month from 15.6% in the previous month. This led thecountry's trade surplus to narrow to US$3.9 billion in November from US$4.1 billion in the previous month.

For export and import statistics in the Republic of Korea, refer to this link:http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php

Shenzhen Issues CNY2.2 Billion of Local Government Bonds;

ICBC Issues US$750 Million 10-Year Bond;

Hyundai Motors Prices US$500 Million 5.5-Year Bond;

BMW Australia Sells CNH400 Million 1-Year Bond;

Anih Raises MYR2.5 Billion from Multi-Tranche Islamic MTN;

DRB-HICOM Raises MYR500 Million from Dual-Tranche Sukuk;

LCY Corporate Bond Issuance in Republic of Korea Rises in October.......................................................................................................................Last week the local government of Shenzhen issued CNY1.1 billion worth of 3-year bonds at a coupon rate of 3.03%and another CNY1.1 billion worth of 5-year bonds at a coupon of 3.25%. Meanwhile, Industrial and Commercial Bank ofChina (ICBC) issued US$750 million worth of 10-year bonds at a coupon of 4.875%. The deal was subscribed by mostlyAsian investors who purchased 95% of the issue size. In Hong Kong, China, BMW Australia issued CNH400 millionworth of 1-year bonds at a coupon of 2.0%.

Hyundai Motors-through its issuing entity Hyundai Capital America-priced a 5.5-year US$500 million bond at a couponrate of 4.0% last week.

In Malaysia toll road operator Anih Berhad issued MYR2.5 billion worth of multi-tranche Islamic medium-term notes lastweek. The notes, rated AAIS by Malaysian Rating Corporation (MARC), were issued in tenors of 3 years-18 years andcarried coupons from 4.40% to 6.15% per annum. Anih also issued 19- and 20-year junior bonds worth MYR350 millionand MYR270 million, respectively, both carrying a 7.00% coupon per year.

Malaysian holding company DRB-HICOM Berhad issued MYR500 million worth of dual-tranche sukuk (Islamic bonds)last week. The sukuk, rated AAIS with stable outlook by MARC. The 5-year sukuk worth MYR250 million pays 4.5%profit per year while the 7-year sukukworth MYR250 million carries 4.75% per year profit rate.

The Financial Supervisory Service (FSS) in the Republic of Korea reported that local currency (LCY) corporate bondissuance rose 20.3% m-o-m to KRW12.4 trillion in October. This was led by a 51.3% m-o-m hike in non-financialcorporate bond issuance, which reached KRW6.4 trillion for the month, as non-financial companies raised funds inpreparation for refinancing a large amount of bonds maturing in 1H12. Issuance of bank debentures also climbed 17.4%m-o-m to KRW2.6 trillion in October, while asset-backed securities issuance surged 175.2% m-o-m to KRW1.6 trillion.In contrast, financial companies' bond issuance dropped 44.2% m-o-m to KRW1.8 trillion for the month.

Municipal Bond and Retail SukukIssuances Planned in Indonesia;

Security Bank Plans to Issue PHP5 Billion of Long-Term Negotiable Certificates of Time Deposit

.......................................................................................................................According to Pemeringkat Efek Indonesia (Pefindo), two local governments, Jakarta and Makassar, are planning toissue municipal bonds. They have informally expressed interest to Pefindo on the process of issuing bonds. The localgovernment of Jakarta may issue about IDR1.7 trillion worth of bonds while the government of Makassar may issue lessthan IDR1.0 trillion.

Meanwhile, the Indonesian government plans to offer retail sukuk in March next year. According to news reports, thefinance ministry's Debt Management Office began accepting applications last week from banks and brokerages to actas the sales agent for the retail sukuk issue. The government will appoint the sales agent on 4 January 2012.

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http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php&src=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php&src=wdh


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Municipal Bond and Retail SukukIssuances Planned in Indonesia;

Security Bank Plans to Issue PHP5 Billion of Long-Term Negotiable Certificates of Time Deposit (cont)

.......................................................................................................................In the Philippines, Security Bank plans to issue up to PHP5 billion of Long-Term Negotiable Certificates of Time Deposit(LTNCD) after securing approval from the Bangko Sentral ng Pilipinas on 17 November. Minimum deposits for theLTNCDs will be PHP50,000 in increments of PHP1,000. The bank is looking at issuing bonds with minimum maturity of5.25 years up to a maximum of 7 years. The timing for the issue is still to be finalized. LTNCDs are similar to timedeposits that carry higher interest rates due to their long-term nature and tax-exempt features, and they cannot be pre-terminated. However, these instruments can be traded in the secondary market. The bank named Deutsche Bank AG(Manila) and Standard Chartered Bank as joint lead underwriters for the issue.

BNM and MAS Sign MOU to Enhance Domestic Liquidity.......................................................................................................................Bank Negara Malaysia (BNM) and the Monetary Authority of Singapore (MAS) signed a Memorandum of Understandinglast week to enhance the liquidity of financial institutions in both countries and strengthen cooperation in carrying outdomestic liquidity management. The cross-border collateral agreement allows eligible financial institutions in Singapore

to pledge ringgit or MYR-denominated government and central bank securities to obtain Singapore dollar liquidity fromthe MAS. Likewise, eligible financial institutions in Malaysia may pledge Singapore dollars or SGD-denominatedgovernment securities to obtain ringgit liquidity from BNM.


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Tip: Zoom-in on the table using the Acrobat zoom tool

Selected Government Security Yields

3-Month Selected LCY Government Security Yields

Close of 2 December 2011

Previous

Day*

Previous

Week*1-Jan-11*

US -0.01 0.00 -2.04 -12.48

EU 0.23 1.80 -8.70 -16.80

Japan 0.10 0.00 0.00 -2.40

PRC 2.54 -5.00 -12.00 -64.00

Hong Kong, China 0.17 0.00 3.00 -11.00

India 8.78 4.00 -6.00 168.00

Malaysia 2.99 0.00 0.00 21.30Korea, Rep. of 3.32 0.00 0.00 81.00

Philippines 2.10 2.50 22.92 90.50

Singapore 0.32 0.00 1.00 -7.00

Thailand 3.25 2.17 -4.33 127.99

basis point change fromLatest

ClosingMarkets

-2.04

-8.70

0.00

-12.00

3.00

-6.00

0.00

0.00

22.92

1.00

-4.33

10-Year Selected LCY Government Bond Yields

Close of 2 December 2011

Previous

Day*

Previous

Week*1-Jan-11*

US 2.03 -5.42 6.96 -126.04

EU 2.14 -4.30 -12.80 -82.80

Japan 1.04 -2.10 1.60 -8.40

PRC 3.49 -8.00 -14.00 -42.00

Hong Kong, China 1.35 -0.70 8.30 -150.50

India 8.67 -3.00 -15.10 75.30

Indonesia 6.23 -14.40 -66.50 -137.60

Malaysia 3.72 0.00 -2.40 -31.60

Korea, Rep. of 3.79 -1.00 -1.00 -73.00

Philippines 5.59 0.53 -9.40 -29.57

Singapore 1.73 4.00 6.00 -98.00

Thailand 3.29 -5.00 -12.90 -43.40

Viet Nam 12.88 26.20 19.20 112.50

basis point change fromLatestClosing

Markets

6.96

-12.80

1.60

-14.00

8.30

-15.10

-66.50

-2.40

-1.00

-9.40

6.00

-12.90

19.20

Source: Based on data from Bloomberg, LP.


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Benchmark Yield Curves Local Currency Government Bonds

ip: Zoom-in on the table using the Acrobat zoom toolTHong Kong, China IndonesiaChina, Peoples Rep. of

Source: Based on data from Bloomberg.

JapanEUUS

Viet NamThailandSingapore

PhilippinesMalaysiaKorea, Republic of

2.40

2.65

2.90

3.15

3.40

3.65

3.90

0 1 2 3 4 5 6 7 8 9 10 11

Yield(%)

Time to maturity (years)

0.0

0.5

1.0

1.5

2.0

0 2 4 6 8 10 12 14 16

Yield(%)


02- Dec -11 25- No v- 11 18- No v- 11

4.5

5.3

6.0

6.8

7.5

8.3

0 3 6 9 12 15 18 21 24 27 30 33

Yield(%)


0 2- De c- 11 25 -N ov -11 18 -N ov -1102- Dec -11 25- No v- 11 18- No v- 11

3.00

3.25

3.50

3.75

4.00

4.25

0 2 4 6 8 10 12 14 16 18 20 22

Yield(%)


0 2- Dec -11 25 -N ov -11 18 -N ov -11

2.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

0 2 4 6 8 10 12 14 16 1 8 20 22

Yield(%)


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

0 3 6 9 12 15 18 21 24 27

Yield(%)


02 -D ec -1 1 2 5- No v- 11 1 8- No v- 1102- Dec- 11 25- No v- 11 18- No v- 11

0.0

0.5

1.0

1.5

2.0

2.5

0 3 6 9 12 15 18 21

Yield(%)


02- Dec -11 25- No v- 11 18- No v- 11

3.0

3.3

3.5

3.8

0 2 4 6 8 10 12 14 16

Yield(%)


12.0

12.3

12.5

12.8

13.0

1 2 3 4 5 6 7 8 9 1 0 11 12 13 14 15 16

Yield(%)


02- Dec- 11 25- No v- 11 18- No v- 11 02- Dec -11 25- No v- 11 18- No v- 11

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0 4 8 12 16 20 24 28 32

Yield(%)


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0 5 10 15 20 25 30

Yield(%)


0.0

0.3

0.5

0.8

1.0

1.31.5

1.8

2.0

2.3

2.5

0 4 8 12 16 20 24 28 32 36 40

Yield(%)


02-Dec-11 25-Nov-11 18-Nov-11 02-Dec-11 25-Nov-11 18-Nov-110 2-De c-1 1 2 5-No v-1 1 1 8- No v-1 1

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2-versus-10 Yield Spread Chart

table using the Acrobat zoom toolTip: Zoom-in on theYield Spread between the Two- and Ten-Year Government Bonds

0 50 100 150 200 250 300 350

China, People's Rep. of

Hong Kong, China

Indonesia

Korea, Rep. of

Malaysia

Philippines

Singapore

Thailand

Viet Nam

U.S.

E.U.

Japan

basis points

2-Dec-11

25-Nov-11

18-Nov-11

Source: Based on data from Bloomberg LP.

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Policy Rate versus Inflation Rate Charts

ip: Zoom-in on the table using the Acrobat zoom toolT

China, Peoples Rep. of Hong Kong, China India

Philippines Thailand

PRC uses 1-year lending rate as one of its policy rates.

Source: Bloomberg LP.

The Hong Kong Monetary Authority maintains a Discount

Window Base Rate. Source: Bloomberg LP.

The Reserve Bank of India uses the repurchase (repo) cut-

off yield as its policy rate. Source: Bloomberg LP.

Indonesia Korea, Republic of Malaysia

Bank Indonesia uses its reference interest rate (BI rate) as its

policy rate. Source: Bloomberg LP. The Bank of Korea shifted its policy rate from the overnight

repurchase (repo) rate to the 7-day repo rate in March 2008.

Source: Bloomberg LP.

Bank Negara Malaysia uses the overnight policy rate

(OPR) as its policy rate. Source: Bloomberg LP.

Viet Nam

Bangko Sentral uses the Philippine overnight reverse

repurchase agreement rate as one of its policy

instruments. Source: Bloomberg LP.

The Bank of Thailand replaced the 14-day repurchase

rate with the 1-day repurchase rate in January 2007 as

its policy rate. Source: Bloomberg LP.

The State Bank of Viet Nam uses a benchmark prime

lending rate as its policy rate. Source: Bloomberg LP.

Inflation Rate

5.50

1-yearLending Rate

6.56

-4

-2

0

2

4

6

8

10

Jan-06 Dec-06 Dec-07 Dec-08 Nov-09 Nov-10 Nov-11

Inflation Rate

5.80

HKMA BaseRate

0.50

-4

-2

0

2

4

6

8


9.73

RepurchaseCut-off Yield

Inflation Rate

8.50

-2

0

2

4

6

8

10

12


Inflation Rate

3.40

OvernightPolicy Rate

3.00

-4

-2

0

2

4

6

8

10


Inflation Rate

4.20

7-Day RepoRate

3.25

0

4

6

8


2

Inflation Rate 4.15

6.00

0

2

4

6

8

10

12

14

16

18

20


BI Rate

InflationRate

5.2

OvernightReverse

Repo Rate

4.50

0

2

4

6

8

10

12


Inflation Rate

4.19

1-Day RepoRate

3.25

-6

-4

-2

0

2

4

6

8

10


Inflation Rate

19.83

PrimeLending Rate

9.00

0

3

6

9

12

15

18

21

24

27

30


9


10/13


11/13

.....



Selected Debt Security Issuances (28 November - 2 December 2011)

PRC 29-Nov 1-year PBOC Notes 3.49 15.00 15.00

HK 29-Nov 91-day Exchange Fund Bills 0.17 26.05 26.05

182-day Exchange Fund Bills 0.17 9.00 9.00

JP 29-Nov 2-year Japan Government Bonds 0.15 0.20 2,700.00 2,705.46

30-Nov 3-month Treasury Discount Bil ls 0.10 5,700.00 5,739.83

KR 28-Nov 91-day Monetary Stabilization Bonds 3.49 1,200.00 1,010.00

1-year Monetary Stabilization Bonds 3.50 800.00 840.00

20-year Treasury Bonds 4.01 4.75 1,000.00 1,000.00

MY 29-Nov 5-year Malaysian Govermnet Securities 3.30 3.00 3.00

SG 28-Nov 91-day Treasury Bills 0.27 4.00 4.00

TH 29-Nov 28-day BOT Bills 3.21 15.00 15.00

91-day BOT Bills 3.18 17.00 17.00182-day BOT Bills 3.18 18.00 18.00

Sources: Local market sources and Bloomberg, LP.

C o u p o n(in % ) A m o unt O f fe r e dL C Y B i llio n s

A m o u n t Is s u e dL CY B i l l i onsarkets

A uc t i onD ate T y p e o f S e c u rity

A v e r a g eY i e ld ( % )


12/13

.....


12


Selected Asia Data Releases (6 - 12 December 2011)

Source: AsianBondsOnline, Bloomberg LP, and Reuters.

Peoples Republic o f China

Exports

y-o-y, %

NOV

12/10 10/10: 22.9%

11/10: 34.9%

09/11: 17.1%

10/11: 15.9%

The PRCs export grow th rate decreased to 15.9% y-o-y in October from 17.1% in

the previous month.

R e le a s e D a te R e c e n t T r e n d so u n tr y /V a r ia b le H is to r ic a l D a ta

Industrial production in the PRC expanded 13.2% y-o-y in October f ollow ing 13.8%grow th in the previous month.

Bank Indonesia (BI) low ered its benchmark interest rate by 50 basis points (bps )

to 6.00% in its meeting on 10 November.

09/10: 5.8%

10/10: 2.6%

08/11: 3.7%

09/11: 2.5%

Industrial production grow th in Malaysia eased to 2.5% y -o-y in September from

3.7% in the previous month.

Japan

Machine Order s

y-o-y,%

OCT

12/08 11/10: 2.50%

12/10: 2.50%

10/11: 3.25%

11/11: 3.25%

Grow th in machine orders in Japan surged to 9.8% y -o-y in October f rom 2.1% in

August.

Peoples Republic of ChinaIndustrial Production

y-o-y, %

NOV

The 7-day repurchas e rate in the Republic of Korea has remained steady at 3.25%

since June.

Malaysia

Industrial Production

y-o-y, %

OCT

12/08 09/10: 911

10/10: 903.6

08/11: -694.7

09/11: 373.2

Japans trade balance rec overed to a s urplus of JPY373.2 billion in September

from a def icit of JPY694.7 billion in A ugust.

Japan

Trade Balance

JPY billion

OCT

Peoples Republic of China

Consum er Price Index

y-o-y, %

NOV

12/09 10/10: 4.4%

11/10: 5.1%

09/11: 6.1%

10/11: 5.5%

Consumer price inflation in the Peoples Republic of China (PRC) eased to 5.5% y-o -

y in October from 6.1% in September.

12/09 10/10: 13.1%11/10: 13.3%

09/11: 13.8%

10/11: 13.2%

12/08

12/08 09/10: 4.1%

10/10: 6.9%

08/11: 2.1%

09/11: 9.8%

Republic of Kore a

Real GDP (Final)

y-o-y, %

3Q11

12/06 3Q10: 4.4%

4Q10: 4.7%

2Q11: 3.4%

3Q11: 3.4%

Adv ance estimates for the Republic of Koreas gross domestic produc t (GDP)

show ed grow th of 3.4% year-on-year (y-o-y) in 3Q11, the same as in the

previous quarter.

Republic of Kore a

7-Day Repurchase Rate

%

8 DEC

10/10: 3.3%

11/10: 3.7%

09/11: 4.8%

10/11: 5.2%

The Philippines c onsumer price inflation quickened to 5.2% y -o-y in October f rom

4.8% in September based on the new series using 2006 as the base y ear.

12/06Philippines

Consum er Price Index

y-o-y, %

NOV

Indonesia

BI Refe re nce Rate

%

8 DEC

12/08 11/10: 6.50%

12/10: 6.50%

10/11: 6.50%

11/11: 6.00%

12/09 10/10: 5.0%

11/10: 4.9%

09/11: 5.7%

10/11: 5.6%

Producer prices in the Republic of Korea c limbed 5.6% y-o-y in October f ollow ing

a 5.7% hike in September.

Malaysia

Exports

y-o-y, %

OCT

12/09 09/10: 5.3%

10/10: 0.4%

08/11: 10.9%

09/11: 16.6%

Malaysias ex port grow th rate increased to 16.6% y- o-y in September from 10.9%

in August.

Republic of Kore a

Producer Price Index

y-o-y, %

NOV


13/13

.....


DEBTHIGHLIGHTS

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News Articles: Sources for Further Reading

Consumer Price Inflation Eases in Indonesia,Accelerates in Republic of Korea, Remains Steady inThailand in November

Indonesian Inflation Hits 19-Month LowJakarta Globe (01 December 2011)

Consumer Price Index in November 2011Statistics Korea (01 December 2011)

Revision of the Consumer Price Index based on 2010Statistics Korea (29 November 2011)

Prices up 4.19% on year in NovemberThe Nation (01 December 2011)

PRC Cuts Reserve Requirement Ratio of Banks;Policy Rates Kept Unchanged in the Philippines,

Lowered in Thailand China to Lower RRR For First Time in Three Years

Xinhua (30 November 2011)

Monetary Board Keeps Policy Settings SteadyBangko Sentral ng Pilipinas (01 December 2011)

Monetary Policy Committees Decision on 30 November2011Bank of Thailand (30 November 2011)

Philippine Real GDP Growth Eases to 3.2% y-o-y in3Q11; Manufacturing Activity Contracts in the PRC inNovember; Industrial Output Grows in Japan andRepublic of Korea, Contracts in Thailand in October

Philippine Economy Grows by 3.2 Percent in Q3 2011

National Statistical Coordination Board(28 November 2011)

China's Nov. PMI Falls to 49 Pct, Indicating ContractionXinhua (01 December 2011)

The Industrial Activities in October 2011Statistics Korea (30 November 2011)

Press Release on Economic and Monetary Conditionsfor October 2011Bank of Thailand (30 November 2011)

Current Account Surplus Widens in Republic of Korea,Narrows in Thailand in October

Balance of Payments during October 2011The Bank of Korea (29 November 2011)

Press Release on Economic and Monetary Conditionsfor October 2011Bank of Thailand (30 November 2011)

Export Growth Slows in Indonesia in October,Accelerates in Republic of Korea in November

RIs Exports in October Fell SlightlyAntara News (01 December 2011)

South Koreas Trade Surplus to US$3.9 Bln in Nov.YONHAP News (01 December 2011)

Shenzhen Issues CNY2.2 Billion of Local GovernmentBonds; ICBC Issues US$750 Million 10-Year Bond;Hyundai Motors Prices US$500 Million 5.5-Year Bond;BMW Australia Sells CNH400 Million 1-Year Bond;Anih Raises MYR2.5 Billion from Multi-Tranche IslamicMTN; DRB-HICOM Raises MYR500 Million from Dual-Tranche Sukuk; LCY Corporate Bond Issuance inRepublic of Korea Rises in October

ICBC Sells $750 Million Bond through Hong KongBranchFinance Asia (01 December 2011)

BONDS: BMW Australia Raises Rmb400m via1-yr DimSum DebutIFR Asia (28 November 2011)

BOND: Hyundai Motor US$500m to Price TodayIFRAsia (01 December 2011)

Anih Tolls for SukukIFR Asia (26 November 2011)

DRB-Hicom Issues RM500m Debt Notes for WorkingCapital, ProjectsThe Edge Malaysia (01 December 2011)

Analysis of Direct Corporate Financing for October2011Capital, ProjectsFinancial Supervisory Service (29 November 2011)

Municipal Bond and Retail Sukuk Issuances Planned inIndonesia; Security Bank Plans to Issue PHP5 Billion ofLong-Term Negotiable Certificates of Time Deposit

Two Local Governments Review Bond IssuanceBisnis Indonesia (01 December 2011)

Govt to Offer Sukuk Retail Bonds in MarchThe Jakarta Post (30 November 2011)

Security Bank Gets Approval for LTNCDsPhilippine Star (29 November 2011)

BNM and MAS Sign MOU to Enhance Domestic Liquidity

Memorandum of Understanding between Bank NegaraMalaysia and the Monetary Authority of SingaporeBank Negara Malaysia (28 November 2011)

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