asian bonds online weekly report - august 29, 2011

8/4/2019 Asian Bonds Online Weekly Report - August 29, 2011

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29 August 2011 asianbondsonline.adb.org

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Key Developments in Asian Local Currency Markets

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onsumer price inflation in Hong Kong, China quickened to 7.9% year-on-year (y-o-y) in July due to increasingfood prices and a low base effect resulting from the timing difference of government's public housing reliefmeasures. Japan's core consumer price index rose slightly in July to 0.1% y-o-y as energy prices increased.Singapore's consumer price inflation accelerated to 5.4% y-o-y in July from 5.2% in June on the back of higher

costs for transportation, accommodation, and food. Consumer price inflation in Viet Nam rose to its highest level sinceDecember 2008, reaching 23.1% y-o-y in August from 22.2% in July as costs for food surged.

The Bank of Thailand last week raised its 1-day repurchase rate by another 25 basis pointsto 3.5%. This was the sixth consecutive ratehike since January. Heightened concerns overinflation outweighed the risks to growth asdomestic consumption and investment areexpected to remain robust.

Moody's Investors Service lowered Japan's

credit rating to Aa3 from Aa2. The outlook onthe ratings is stable. Standard and Poor'saffirmed its AAA sovereign credit rating andstable outlook for the Singapore government'slong-term debt.

On 24 August, the Japan Credit RatingAgency (JCR) affirmed Indonesia's ratings forlong-term FCY and LCY senior debt at BBB-and BBB, respectively. The outlook for bothratings was stable.

The People's Bank of China (PBOC)announced the expansion of the existing cross-

border trade renminbi settlement program toinclude the entire country. During the first halfof the year, the People's Republic of China's(PRC) total renminbi settlement in cross-bordertrade increased 13.3 times to reach RMB957.6billion.

The Republic of Korea's external debtposition rose to USD398.0 billion in June. Thecountry's outstanding household loans grew8.7% y-o-y in July to reach KRW826 trillion.Finally, the credit default swap (CDS) spreadfor 5-year FCY-denominated governmentbonds widened to 149.2 basis points. LCY

corporate bond issuance in the Republic ofKorea was down 29.5% month-on-month (m-o-m) to KRW8.1 trillion in July. However, thecumulative corporate bond issuance over theJanuary-July period stood at KRW75.1 trillion,which was up 9.3% y-o-y.

Last week, KT Corporation of the Republicof Korea raised KRW600 billion from a triple-tranche bond sale. In Malaysia, YTL Power

International sold MYR2.2 billion worth of 7-year notes with a couponof 4.35%. In the Philippines, United Coconut Planters Bank issuedPHP3.15 billion of LTNCD (long-term negotiable certificates of timedeposit), which carry a coupon of 6.0% (payable quarterly) and have amaturity of 5 years and 3 months. Thai property developer QualityHouses raised a total of THB3 billion in bonds. Meanwhile, the StateRailway of Thailand issued THB1 billion of 12-year bonds at a couponof 3.99%.

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

What's New: The next edition of the Asia Bond Monitor will belaunched on 1 September.

C Asia Bond Monitor March 2011 read mor

10-Year Selected LCY Government Security Yields Close of 26 August 2011basis point change from

Previous Day*Markets Previous Week*Latest Closing 1-Jan-11*

US 2.19 -3.87 12.76 -110.36

EU 2.16 -2.90 5.20 -80.60

Japan 1.04 0.10 5.30 -8.50PRC 3.95 0.00 1.00 4.00

ong Kong, China 1.76 -0.20 13.90 -109.90

dia 8.30 6.50 3.90 38.40

H

In

Indones ia 6.84 -1.30 -10.10 -76.40

Malays ia 3.65 -0.20 0.80 -39.30

Korea, Rep. of 3.87 3.00 3.00 -65.00

Philippines 5.77 0.78 8.09 -12.01

Singapore 1.63 0.00 4.00 -108.00

Thailand 3.49 1.20 1.90 -23.20

Viet Nam 12.72 14.60 17.70 96.70

12.76

5.20

5.30

-10.10

0.80

3.00

8.09

4.00

1.90

17.70

1.00

13.90

3.90

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
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Summary Text of News Articles

Consumer Price Inflation Accelerates in Hong Kong, China; Japan; Singapore; and Viet Nam.......................................................................................................................Consumer price inflation in Hong Kong, China rose to 7.9% year-on-year (y-o-y) in July. According to the Census and

Statistics Department, the large increase was partly due to a low base effect resulting from the difference in the timingof the waiving of public housing rentals that took effect in July-September in 2010 and in August-September in 2011.Netting out the effect of the government's one-off relief measures, consumer price inflation rose to 5.8% y-o-y in Julyfrom 5.6% in June, due to higher food prices and private residential rentals.

In Japan, consumer price inflation climbed slightly to 0.2% y-o-y in July from a decline of 0.4% in June, mostly onincreases in energy costs. The core consumer price index (CPI)-which includes oil products but excludes volatile pricesof fresh fruit, vegetables, and seafood-was up 0.1% y-o-y in July against a forecasted -0.1% decline. The governmentsharply revised this year's CPI data downward earlier this month after changing the base year and the components thatcomprise the index to better reflect trends in consumer spending. The government revises the base year for the dataonce every 5 years.

Singapore's consumer price inflation accelerated to 5.4% y-o-y in July from 5.2% in June as a result of higher costs fortransportation, accommodation, and food. Transportation costs rose 11.5% y-o-y in July from 10.4% in June, while

housing costs increased 9.5% in July from 8.8% in June. Food price increases eased slightly to 3.0% y-o-y in July from3.1% in June. On a month-on-month (m-o-m) basis, consumer price inflation rose 1.5% in July. Core inflation rose 2.2%y-o-y and 0.5% q-o-q.

Consumer price inflation in Viet Nam in August rose to its highest level since December 2008, reaching 23.1% y-o-yfrom 22.2% in July. Prices for food and foodstuff surged 34.1% y-o-y in August, while the cost of education increased25.2%. Costs for construction materials and transportation increased 23.8% and 21.5% y-o-y, respectively. On a m-o-mbasis, consumer price inflation rose 0.9%.

For historical trends on Hong Kong, China's consumer price inflation, refer to this link:http://asianbondsonline.adb.org/hongkong/data/marketwatch.php?code=policy_rate_and_inflation_trends

For historical trends on Japan's consumer price inflation, refer to this link:http://asianbondsonline.adb.org/japan/data/marketwatch.php?code=policy_rate_and_inflation_trends

For historical trends on Singapore's consumer price inflation, refer to this link:http://asianbondsonline.adb.org/singapore/data/macroeconomic_credit.php

For historical trends on Vietnam's consumer price inflation, refer to this link:http://asianbondsonline.adb.org/vietnam/data/marketwatch.php?code=policy_rate_and_inflation_trends

Thailand Raises Repurchase Rate 25 bps to 3.5%.......................................................................................................................The Bank of Thailand (BOT) raised its 1-day repurchase rate by another 25 basis points (bps) last week for the sixthconsecutive rate hike since January. The Monetary Policy Committee of the BOT voted 5 to 2 to increase the policy rate25 bps to 3.5%, citing the heightened risk of inflation as the primary reason. Inflationary pressure is becoming anincreasing concern as domestic consumption and investment are expected to expand. Favorable employmentconditions, improved consumer confidence, strong growth in credit, and fiscal stimulus are expected to boost domesticdemand. Thailand's policy rate is likely to be raised again in November to 4.0%, according to analysts.

For historical trends on Thailand's policy rate, refer to this link:http://asianbondsonline.adb.org/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends

Japan Credit Rating Agency Affirms Indonesia's BBB- Rating; Moody's Lowers Japan's Credit Rating to Aa3;

S&P Affirms AAA Credit Rating for Singapore.......................................................................................................................On 24 August, Japan Credit Rating Agency (JCR) affirmed Indonesia's ratings for long-term FCY senior debt at BBB-and long-term LCY senior debt at BBB. The outlook for both ratings was stable. According to JCR, its ratings reflectIndonesia's sustainable economic growth outlook, which is underpinned by solid domestic demand, a reduced publicdebt burden, and reinforced resilience to external shocks.

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http://asianbondsonline.adb.org/hongkong/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/hongkong/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/japan/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/japan/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/singapore/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/singapore/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/vietnam/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/vietnam/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/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/vietnam/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/singapore/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/japan/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdhhttp://asianbondsonline.adb.org/hongkong/data/marketwatch.php?code=policy_rate_and_inflation_trends&src=wdh


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Japan Credit Rating Agency Affirms Indonesia's BBB- Rating; Moody's Lowers Japan's Credit Rating to Aa3;

S&P Affirms AAA Credit Rating for Singapore (cont)

.......................................................................................................................Moody's Investors Service (Moody's) lowered Japan's credit rating to Aa3 from Aa2 on 24 August. The outlook on therating is stable. According to Moody's, the rating downgrade was prompted by large budget deficits and the build-up ofJapanese government debt since the 2008/09 global recession. Moody's identified several factors that are making itdifficult for Japan to slow the growth of its debt-to-GDP ratio, including frequent changes in administrations over the past5 years that have prevented the government from implementing long-term economic and fiscal strategies. This latestrating action, however, does not affect Moody's Aaa ratings for Japan's country and bank deposit ceilings.

Standard and Poor's (S&P) announced that it had affirmed its AAA sovereign credit rating and stable outlook for theSingapore government's long-term debt. The reaffirmation reflects Singapore's "extensive fiscal and external strengths,and its solid record of prudent macroeconomic management," according to S&P. Singapore is the only country in Asiato hold S&P's AAA credit rating.

For statistics on Indonesia's sovereign ratings, refer to this link:http://asianbondsonline.adb.org/indonesia.php

For statistics on Japan's sovereign ratings, refer to this link:http://asianbondsonline.adb.org/japan.php

For statistics on Singapore's sovereign ratings, refer to this link:http://asianbondsonline.adb.org/singapore.php

PBOC's Cross-Border Trade Renminbi Settlement Program Expands Nationwide.......................................................................................................................The People's Bank of China (PBOC) announced the expansion of the existing cross-border trade renminbi settlementprogram to include the entire country. When the program was launched in July 2009, only 365 enterprises in Shanghai,Guangzhou, Shenzhen, Zhuhai, and Dongguan were allowed to use renminbi to settle their trade with partners in HongKong, China; Macau; and Association of Southeast Asian Nations (ASEAN) member countries. In June 2010, theprogram was expanded to cover 20 additional provincial regions, municipalities, and autonomous regions in the

People's Republic of China (PRC). During the first half of this year, the People's Republic of China's (PRC) total cross-border trade renminbi settlement increased 13.3 times to reach RMB957.6 billion.

Republic of Korea's External Debt Rises to USD398 Billion in June, Household Loans Climb 8.7% in 2Q11,

CDS Premiums Surge and Consumer Confidence Falls in August.......................................................................................................................The Republic of Korea's external debt position rose to USD398.0 billion in June from USD382.6 billion in March. Thiswas led by a USD14.1 billion quarter-on-quarter (q-o-q) increase in long-term external debt, which stood at USD248.2billion at end-June. Short-term external debt rose USD1.3 billion to USD149.7 billion. Banks remained as the largestholder of external debt, accounting for 49.4% of the total.

Meanwhile, the country's outstanding amount of household loans at end-July stood at KRW826.0 trillion, up 8.7% y-o-y.The outstanding household loans of commercial and specialized banks' rose KRW9.2 trillion in 2Q11 to KRW444.3trillion, while loans extended by non-bank depository corporations and other financial corporations increased KRW6.4

trillion to KRW173.6 trillion and KRW2.2 trillion to KRW208.2 trillion, respectively.

Last week, the credit default swap (CDS) spread on the Republic of Korea's FCY-denominated government bondsjumped amid worries over United States (US) and European financial institutions. The CDS spread on the country's 5-year FCY-denominated government bonds widened to 149 bps on 24 August, the highest level since it reached 153 bpsin May 2010.

Lastly, the Republic of Korea's composite consumer sentiment index fell 3 points in August to 99 amid a significantweakening of confidence in current domestic economic conditions.

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http://asianbondsonline.adb.org/indonesia.php?src=wdhhttp://asianbondsonline.adb.org/indonesia.php?src=wdhhttp://asianbondsonline.adb.org/japan.php?src=wdhhttp://asianbondsonline.adb.org/japan.php?src=wdhhttp://asianbondsonline.adb.org/singapore.php?src=wdhhttp://asianbondsonline.adb.org/singapore.php?src=wdhhttp://asianbondsonline.adb.org/singapore.php?src=wdhhttp://asianbondsonline.adb.org/japan.php?src=wdhhttp://asianbondsonline.adb.org/indonesia.php?src=wdh


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Issuance in the Republic of Korea, Malaysia, Philippines, and Thailand.......................................................................................................................In the Republic of Korea, LCY corporate bond issuance was down 29.5% month-on-month (m-o-m) to KRW8.1 trillion in

July, compared with KRW11.5 trillion in June, based on Financial Supervisory Service data. This was partly due to a62.0% monthly drop in bank debentures, which amounted to KRW1.2 trillion for the month, as domestic banksregistered higher deposits, resulting in lower demand for funding. Bonds issued by financial companies fell 11.2% m-o-m to KRW2.7 trillion and issuance of asset-backed securities plunged 84.0% m-o-m to KRW213 billion in July. Issuanceby non-financial companies in July remained about the same from the previous month at KRW4.0 trillion. However,cumulative corporate bond issuance in January-July stood at KRW75.1 trillion, which was up 9.3% y-o-y.

Meanwhile, KT Corporation raised KRW600 billion from a triple-tranche bond sale last week. These bonds include a 5-year tenor worth KRW260 billion with a coupon rate of 4.06%, a KRW250 billion 10-year tenor issued at a coupon rateof 4.19%, and a KRW90 billion 7-year tenor at a coupon rate of 4.11%.

In Malaysia, YTL Power International issued MYR2.2 billion worth of 7-year notes under its newly established MYR5billion Medium-Term Notes Programme. The issuance, rated AA1 by RAM Ratings, carries an annual coupon of 4.35%.

In the Philippines, United Coconut Planters Bank raised PHP3.15 billion from its issuance of LTNCD (long-termnegotiable certificates of time deposit), which carry a coupon of 6% (payable quarterly) and have a maturity of 5 yearsand 3 months. The proceeds from the offering will be used to expand the bank's consumer lending operations. CiticorpCapital Philippines Inc. was the lead arranger for the issue.

Thai property developer Quality Houses raised a total of THB3 billion in two tranches last week. Its 4-year bonds havean issue size of THB1.6 billion and carry a 4.7% coupon, while the 5-year bonds have an issue size of THB1.4 billion ata coupon of 5.0%. Meanwhile, the State Railway of Thailand issued THB1 billion of 12-year bonds at a coupon of3.99%.


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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 26 August 2011

Previous

Day*

Previous

Week*1-Jan-11*

US -0.01 0.00 -0.51 -12.48

EU 0.57 0.90 -12.40 17.40

Japan 0.10 0.00 0.00 -2.40

PRC 3.24 0.00 0.00 6.00

Hong Kong, China 0.10 0.00 2.00 -18.00

India 8.30 0.00 0.00 120.00

Malaysia 2.95 0.00 -0.10 16.70Korea, Rep. of 3.27 0.00 -1.00 76.00

Philippines 0.81 -4.29 -103.71 -38.21

Singapore 0.13 0.00 2.00 -26.00

Thailand 3.35 1.71 3.86 138.00

basis point change fromLatest

ClosingMarkets

-0.51

-12.40

0.00

0.00

2.00

0.00

-0.10

-1.00

-103.71

2.00

3.86

10-Year Selected LCY Government Bond Yields

Close of 26 August 2011

Previous

Day*

Previous

Week*1-Jan-11*

US 2.19 -3.87 12.76 -110.36

EU 2.16 -2.90 5.20 -80.60

Japan 1.04 0.10 5.30 -8.50

PRC 3.95 0.00 1.00 4.00

Hong Kong, China 1.76 -0.20 13.90 -109.90

India 8.30 6.50 3.90 38.40

Indonesia 6.84 -1.30 -10.10 -76.40

Malaysia 3.65 -0.20 0.80 -39.30

Korea, Rep. of 3.87 3.00 3.00 -65.00

Philippines 5.77 0.78 8.09 -12.01

Singapore 1.63 0.00 4.00 -108.00

Thailand 3.49 1.20 1.90 -23.20

Viet Nam 12.72 14.60 17.70 96.70

Markets

basis point change fromLatestClosing

12.76

5.20

5.30

1.00

13.90

3.90

-10.10

0.80

3.00

8.09

4.00

1.90

17.70

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

2.25

2.50

2.75

3.00

3.25

3.50

3.75

4.00

4.25

0 1 2 3 4 5 6 7 8 9 10 11 12

Yield(%)

Time to maturity (years)

2 6- Aug -11 19 -A ug -11 12 -Au g- 11

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0 2 4 6 8 10 12 14 16

Yield(%)


26- Aug -11 19- Aug -11 12- Aug -11

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

12.0

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

Yield(%)


26- Aug -11 19- Aug -11 12- Aug -11

2.50

3.00

3.50

4.00

4.50

5.00

5.50

6.00

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

Yield(%)


2 6- Aug -11 19 -Au g- 11 12 -A ug -1 1

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

4.64.8

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

9.0

10.0

0 3 6 9 12 15 18 21 24 27

Yield(%)


26 -Aug -1 1 1 9- Au g- 11 1 2- Au g- 112 6- Aug -11 19 -Aug -1 1 1 2- Au g- 11

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

0 3 6 9 12 15 18 21

Yield(%)


26- Aug -11 19- Aug -11 12- Aug -11

2.0

2.3

2.5

2.8

3.0

3.3

3.5

3.84.0

4.3

4.5

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 10 11 12 13 14 15 16 17

Yield(%)


26- Aug -11 19- Aug -11 12- Aug -11 26- Aug -11 19- Aug -11 12- Aug -11

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 4 8 12 16 20 24 28 32

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(%)


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0 5 10 15 20 25 30

Yield(%)


26-Aug-11 19-Aug-11 12-Aug-11 26-Aug-11 19-Aug-11 12-Aug-112 6-A ug -1 1 1 9-A ug -1 1 1 2- Au g-1 1

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2-versus-10 Yield Spread Chart

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

26-Aug-11

19-Aug-11

12-Aug-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

6.50

1-yearLending Rate

6.56

-4

-2

0

2

4

6

8

10

Jan-05 Sep-05 Jun-06 Mar-07 Dec-07 Aug-08May-09Feb-10 Nov-10 Aug-11

Inflation Rate

7.9

HKMA BaseRate

0.5

-4

-2

0

2

4

6

8

Jan-05 Sep-05 Jun-06 Mar-07 Dec-07 Aug-08May-09 Feb-10 Nov-10 Aug-11

9.22

RepurchaseCut-off Yield

Inflation Rate

8.00

-2

0

2

4

6

8

10

12

Jan-05 Sep-05 Jun-06 Mar-07 Dec-07 Aug-08May-09 Feb-10 Nov-10 Aug-11

Inflation Rate

3.40

OvernightPolicy Rate

3.00

-4

-2

0

2

4

6

8

10

Jan-05 Sep-05Jun-06 Mar-07 Dec-07Aug-08May-09 Feb-10 Nov-10Aug-11

Inflation Rate

4.70

7-Day RepoRate

3.25

0

4

6

8

Jan-05 Sep-05 Jun-06 Mar-07 Dec-07Aug-08May-09Feb-10 Nov-10Aug-11

2

Inflation Rate4.61

6.75

0

2

4

6

8

10

12

14

16

18

20

Jan-05 Sep-05Jun-06 Mar-07Dec-07Aug-08May-09Feb-10 Nov-10Aug-11

BI Rate

InflationRate

5.10

OvernightReverse

Repo Rate

4.50

0

2

4

6

8

10

12

Jan-05 Sep-05 Jun-06 Mar-07 Dec-07Aug-08May-09 Feb-10 Nov-10Aug-11

Inflation Rate

4.08

1-Day RepoRate

3.50

-6

-4

-2

0

2

4

6

8

10

Jan-05 Sep-05 Jun-06 Mar-07 Dec-07Aug-08May-09Feb-10 Nov-10Aug-11

Inflation Rate

22.16

PrimeLending Rate

9.00

0

3

6

9

12

15

18

21

24

27

30

Jan-05 Sep-05Jun-06 Mar-07Dec-07Aug-08May-09Feb-10 Nov-10Aug-11

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Credit Default Swap Spreads & Exchange Rate Indexes

ip: Zoom-in on the table using the Acrobat zoom toolTCredit Default Swap Spreads - Senior 5-year*

Exchange Rate Indexes (vis--vis US$, 2 January 2007=100)

* In USD currency and basedon sovereign bonds

Source: Thomson Reuters

Midspre

adinbasispoints

Source: ADB-OREI staffcalculations based onBloomberg data.

50

60

70

80

90

100

110

120

130

50

60

70

80

90

100

110

120

130

Jan-07 Aug-07 Apr-08 Dec-08 Aug-09 Apr-10 Dec-10 Aug-11

China, People's Rep. of

Indonesia

Malaysia

Phil ippines

Thailand

Singapore

Korea, Rep. of

Viet Nam

0

20 0

40 0

60 0

80 0

1,000

1,200

1,400

Dec-07 Jun-08 Nov-08 M ay-09 Oct-09 M ar-10 Sep-10 Feb-11

China, People's Rep. of

Hong Kong, China

Indonesia

Aug-11

Korea, Rep. of

Japan

Malaysia

Phil ippines

Thailand

9


10/12

.....



Selected Debt Security Issuances (22 26 August 2011)

PRC 23-Aug 1-year PBOC Notes 3.58 3.00 3.00

24-Aug 7-year China Government Bonds 3.70 30.00 30.00

25-Aug 3-month PBOC Notes 3.16 3.00 3.00

HK 23-Aug 91-day Exchange Fund Bills 0.10 25.29 25.29

182-day Exchange Fund Bills 0.11 8.00 8.00

15-year Exchange Fund Notes 2.01 2.07 0.60 0.60

ID 23-Aug 6-month Islamic Treasury Bills 4.15 330.00

25-year Islamic Treasury Bonds 8.35 500.00

JP 24-Aug 3-month Treasury Discount Bil ls 0.10 4,800.00 4,759.89

25-Aug 20-year Japan Government Bonds 1.86 1.80 1,100.00 1,099.10

KR 22-Aug 91-day Monetary Stabilization Bonds 3.35 1,000.00 1,000.00

1-year Monetary Stabilization Bonds 3.53 1,000.00 1,010.0020-year Treasury Bonds 3.94 800.00 808.00

MY 22-Aug 86-day BNM Islamic Notes 2.92 2.00 2.00

168-day BNM Notes 2.88 1.50 1.50

364-day BNM Notes 2.90 2.00 2.00

24-Aug 56-day BNM Islamic Notes 2.92 2.00 1.50

82-day BNM Notes 2.91 2.00 2.00

210-day BNM Notes 2.89 2.00 2.00

PH 22-Aug 91-day Treasury Bil ls 0.98 2.00 2.80

182-day Treasury Bil ls 1.00 3.00 3.00

364-day Treasury Bil ls 1.50 4.00 4.00

SG 22-Aug 91-day Treasury Bills 0.06 3.90 3.90

TH 23-Aug 28-day BOT Bills 3.26 15.00 12.39

91-day BOT Bills 3.38 18.00 18.00

182-day BOT Bills 3.46 15.00 15.00

Sources: LocalmarketsourcesandBloomberg,LP.

C o u p o n(in % ) A m o un t O ff e re dL CY B i l l i ons

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 ( % )

1,000.00


11/12

.....


1


Selected Asia Data Releases (30 August 5 September 2011)

Source: AsianBondsOnline, Bloomberg LP, and Reuters.

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

The manufactur ing purchas ing managers index ( PMI) in the Peoples Republic of

China f ell slightly to 50.7 points in July f rom 50.9 points in June.

Thailand

CPI

y-o-y, %

AUG

09/01 07/10: 3.4%

08/10: 3.3%

06/11: 4.06%

07/11: 4.08%

Thailands consumer price inflation rose marginally to 4.08% y-o-y in July after

posting 4.06% in June.

Peoples Republic of China

PMI Manufacturing

Index

AUG

Grow th in the Philippines gross d omestic product (GDP) slow ed to 4.9% y-o- y in

1Q11 from 6.1% in 4Q10.

07/10: 26.7%

08/10: 26.0%

06/11: 11.2%

07/11: 25.2%

The export grow th rate of the Republic of Korea surged to 25.2% y -o-y in July f rom

11.2% in the previous month.

Thailand

Exports

y-o-y, %JUL

08/31 06/10: 47.1%

07/10: 21.1%

05/11: 17.3%06/11: 16.4%

Consumer price inflation in the Republic of Korea accelerated to 4.7% y-o-y in July

from 4.4% in June.

Republic of Korea

Exports

y-o-y, %

AUG

Thailands export grow th rate slow ed to a 20-month low of 16.4% y -o-y in June

following 17.3% grow th in May.

Indonesia

CPI

y-o-y, %

AUG

09/01 07/10: 6.2%

08/10: 6.4%

06/11: 5.5%

07/11: 4.6%

Consumer price inflation in Indonesia eased for a sixth consecutive month in July to

4.6% y-o-y.

Philippines

Real GDP

y-o-y, %

2Q11

08/31 1Q10: 8.4%

2Q10: 8.9%

4Q10: 6.1%

1Q11: 4.9%

09/01 07/10: 51.2

08/10: 51.7

06/11: 50.9

07/11: 50.7

09/01

Republic of Korea

CPI

y-o-y, %

AUG

09/01 07/10: 2.6%

08/10: 2.6%

06/11: 4.4%

07/11: 4.7%

Japan

Jobless Rate

y-o-y, %

JUL

08/30 06/10: 5.2%

07/10: 5.1%

05/11: 4.5%

06/11: 4.6%

The unemployment rate in Japan climbed to 4.6% year-on-year (y-o-y) in June from

4.5% in May.

Japan

Industrial Production

y-o-y, %

JUL

06/10: 16.6%

07/10: 14.6%

05/11: 5.5%

06/11: 1.7%

Japans industrial production contracted 1.7% y-o-y in Junean improvement from

the 5.5% decline in May.

08/31

SingaporePurchasing Managers Index

Index

AUG

09/05 07/10: 52.208/10: 49.4

06/11: 50.4

07/11: 49.3

Singapores PMI fell to 49.3 points in July f rom 50.4 in June.

Japan

Mone tary Base

y-o-y, %

AUG

09/02 07/10: 6.1%

08/10: 5.4%

06/11: 17.0%

07/11: 15.0%

Japans monetary base grew 15.0% y-o-y in July, dow n slightly f rom growth in

June of 17.0%.

Hong Kong, China

Purchasing Managers Index

Index

AUG

09/05 07/10: 51.3

08/10: 52.3

06/11: 50.3

07/11: 51.4

Hong Kong, Chinas PMI rose to 51.4 points in July f rom 50.3 in June.

Indonesia

Exports

y-o-y, %

AUG

09/05 06/10: 31.4%

07/10: 28.9%

05/11: 44.9%

06/11: 49.3%

Exports f rom Indonesia grew 49.3% y -o-y to USD18.4 billion in June after r ising

44.9% in May.


12/12

.....


DEBTHIGHLIGHTS

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News Articles: Sources for Further Reading

Consumer Price Inflation Accelerates in Hong Kong,China; Japan; Singapore; and Viet Nam

Consumer price indices for July 2011Census and Statistics Department (22 August 2011)

UPDATE 1-Japan CPI rises slightly but deflation topersistReuters (25 August 2011)

Singapore Consumer Price IndexSingapore Department of Statistics (23 August 2011)

Consumer price index, gold and USD price indexes,July 2011General Statistics Office of Vietnam (23 August 2011)

Vietnam's August CPI increases 0.93pctIntellasia (24 August 2011)

Thailand Raises Repurchase Rate 25 bps to 3.5%

Monetary Policy Committee's Decision on 24 August2011Bank of Thailand (24 August 2011)

Japan Credit Rating Agency Affirms Indonesia's BBB-Rating; Moody's Lowers Japan's Credit Rating to Aa3;S&P Affirms AAA Credit Rating for Singapore

Japan Credit Rating Agency , Ltd (JCR) AffirmIndonesia Sovereign RatingBank Indonesia (24 August 2011)

Moody's lowers Japan's government rating to Aa3;outlook stableMoody's (24 August 2011)

S&P affirms 'AAA' credit rating for S'pore govt debtChannel News Asia (25 August 2011)

PBOC's Cross-Border Trade Renminbi SettlementProgram Expands Nationwide

China expands cross-border trade RMB settlement towhole nationChina Knowledge (25 August 2011)

Republic of Korea's External Debt Rises to USD398Billion in June, Household Loans Climb 8.7% in 2Q11,CDS Premiums Surge and Consumer Confidence Fallsin August

International Investment Position (end of June 2011)The Bank of Korea (23 August 2011)

Household Credit in Q2 2011The Bank of Korea (22 August 2011)

S. Korea's CDS Premium Hits 15-Month HighYONHAP News (25 August 2011)

Consumer Survey Index, August 2011The Bank of Korea (25 August 2011)

Analysis of Direct Corporate Financing for July 2011Financial Supervisory Service (23 August 2011)

Issuance in the Republic of Korea, Malaysia, Philippines,and Thailand

Low rates lure Malaysian utilities back to bondsReuters (24 August 2011)

UCPB raises P3.15B from LTNCD issuancePhilippine Star (24 August 2011)

Data for KT Corp and Thailand's Quality Houses andState Railway of Thailand were extracted fromBloomberg terminal.

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asian bonds online weekly report - august 29, 2011

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