Asia Bond Monitor November 2018

Transcription

1 January 9 asianbondsonline.adb.org Key Developments in Asian Local Currency Markets L ast week, the Philippines raised USD. billion from the sale of -year global bonds priced at basis points above benchmark United States (US) Treasuries. The bonds carry a coupon rate of.7%. The issuance was strategically announced, riding on the back of positive market sentiment driven by strong US employment data released on January. With the issuance, the Philippines became the first emerging market to offer offshore US dollar bonds this year. Proceeds from the bond sale will be used for general purposes and budgetary support. Japan s current account surplus narrowed to JPY77. billion in November from JPY. trillion in October. In the Republic of Korea, the current account surplus narrowed to USD. billion in November from USD9. billion in October. The Philippines trade deficit reached USD.9 billion in November, up from USD. billion in the same month in the previous year. Exports declined.% year-on-year (y-o-y), a reversal from the.% y-o-y increase posted in November 7. Malaysia s industrial production in November increased.% y-o-y, slowing from.% y-o-y growth in October. The deceleration was due to a slowdown in manufacturing output, which grew.% y-o-y in November versus.% y-o-y in the previous month. In addition, the mining sector registered a decline in output of.7% y-o-y. On the other hand, output from the electricity sector expanded.% y-o-y in November versus.8% y-o-y in October. Consumer prices in the People s Republic of China s (PRC) rose.9% y-o-y in December after climbing.% y-o-y in November. By category, the fastest increase in the PRC s consumer price inflation came from food and medical products and services, with both rising.% y-o-y. For full-year 8, consumer prices rose.%. The PRC s producer prices, on the other hand, rose at a slower pace in December of.9% y-o-y versus.7% y-o-y in November. For full-year 8, producer prices rose.%. Foreign reserves in Hong Kong, China; and Indonesia rose in December, while it declined in Malaysia Hong Kong, China s foreign reserves amounted to USD. billion at the end of December, up from USD. billion in November. In Indonesia, foreign reserves climbed to USD.7 billion at the end of December from USD7. billion a month Asia Bond Monitor November 8 read more -Year Selected LCY Government Security Yields Close of January 9 basis point change from Markets Latest Closing Previous Day* Previous Week* -Jan-9* US EU Japan PRC Hong Kong, China India Indonesia Korea, Rep. of Malaysia Philippines Singapore Thailand Viet Nam Selected Government Security Yields Benchmark Yield Curves - Local Currency Government Bonds -versus- Yield Spread Chart Policy Rate versus Charts Credit Default Swap Spreads & Exchange Rate Indexes Selected Debt Security Issuances Selected Asia Data Releases earlier. Bank Negara Malaysia s international reserves at the end of December amounted to USD. billion, the lowest level of the year and down from USD billion at the end of November. The Government of Indonesia is targeting to raise IDR. trillion from the sale of savings retail bonds to be known as SBR-. The offer period commenced on January and will end on January. The bonds will have a maturity of years and carry an initial coupon rate of 8.%. Last week, local currency government bond yields declined for all tenors in the Philippines and Viet Nam, and for most maturities in the PRC and Indonesia. In contrast, bond yields gained for most maturities in the Republic of Korea, Singapore, and Thailand. Bond yields were mixed in Hong Kong, China and Malaysia. The spread between the - year and -year maturities widened for most emerging East Asian markets except for Indonesia and the Philippines.....

2 ..... Summary Text of News Articles The Philippines Sells USD. Billion of -Year Global Bonds Last week, the Philippines raised USD. billion from the sale of -year global bonds priced at basis points above benchmark United States (US) Treasuries. The issuance was strategically announced, riding on the back of positive market sentiment driven by strong US employment data released on January. With the issuance, the Philippines became the first emerging market to offer offshore dollar bonds this year. In terms of distribution, 7% of the offering was allocated to investors in Asia, while investors from the US and Europe were allocated 8% and %, respectively. By investor type, the global bonds were allocated to asset managers (%); banks (%); sovereign wealth funds, pension funds, and insurance firms (%); and private banks and other investors (%). Proceeds from the bond issue will be used for general purposes and budgetary support. The global bonds will settle on January. Japan s Current Account Surplus Narrows in November; The Republic of Korea s Current Account Surplus Narrows in November Japan s current account surplus narrowed to JPY77. billion in November from JPY. trillion in October, driven by the decline in the primary income account surplus to JPY. trillion from JPY. trillion. In addition, the trade deficit widened to JPY9. billion from JPY.7 billion during the same period. The services account posted a surplus of JPY. billion in November, a reversal from the JPY billion deficit registered in the previous month. The secondary income deficit also narrowed to JPY. billion from JPY8.7 billion during the same period. The Republic of Korea s current account surplus narrowed to USD. billion in November from USD9. billion in October, driven primarily by the decline in the goods account surplus to USD8. billion in November from USD. billion in the previous month as exports fell at a faster pace than imports on a month-on-month basis. The primary income account surplus also fell to USD. billion from USD.9 billion during the same period. Meanwhile, the services account and secondary income account posted larger deficits in November. The Philippines Trade Deficit Widens in November The Philippines balance of trade in goods recorded a deficit of USD.9 billion in November, wider than the USD. billion deficit in November 7. Exports declined.% year-on-year (y-o-y), a reversal from the.% y-o-y increase a year earlier. The decline in exports was due to decreases in sales of chemicals (.9% y-o-y) and electronic products (.% y-o-y), including components and devices (semiconductors). Imports rose.8% y-o-y, which was down from.% y-o-y growth in November 7, supported by increases in iron and steel (.9% y-o-y) and industrial machinery and equipment (.%). For the January November period, the trade deficit stood at USD7.7 billion. Malaysia s Industrial Production Growth Slows in November Malaysia s industrial production in November increased.% y-o-y, slowing from.% y-o-y growth in October. The deceleration was due to a slowdown in manufacturing output, which grew.% y-o-y in November versus.% y-o-y in the previous month. In addition, output in the mining sector declined.7% y-o-y, following an increase of.% y-o-y in the previous month, due to a decrease in natural gas output that offset the marginal increase in crude oil. On the other hand, output growth in the electricity sector accelerated to.% y-o-y in November from.8% y-o-y in October. Consumer Price and Producer Price Inflation Slow in the PRC in December Consumer prices in the People s Republic of China s (PRC) rose.9% y-o-y in December after climbing.% y-o-y in November. By category, the fastest increases came from food and medical products and services, with both rising.% y-o-y. Housing-related prices rose.% y-o-y, while gasoline prices fell.% y-o-y and diesel prices fell.% y-o-y. For full-year 8, consumer prices rose.%. The PRC s producer prices inflation slowed to.9% y-o-y in December from.7% y-o-y in November. For full-year 8, producer prices rose.%. For the historical trend of the PRC s inflation rate, refer to this link:

3 ..... Summary Text of News Articles Foreign Reserves Up in Hong Kong, China and Indonesia in December; Bank Negara Malaysia s International Reserves Fall in December to Lowest Level of the Year Hong Kong, China s foreign reserves amounted to USD. billion at the end of December, up from USD. billion in November. This accounted for about seven times the currency in circulation, or % of the Hong Kong dollar s M. Including unsettled foreign exchange contracts, foreign reserves amounted to USD7. billion at the end of December. In Indonesia, foreign reserves climbed to USD.7 billion at the end of December from USD7. billion a month earlier on increased receipts from oil and gas sales, proceeds from sovereign bond issuance, and the withdrawal of foreign loans. The December reserves position was adequate to fund.7 months of imports or. months of imports and external debt repayment. Bank Negara Malaysia s international reserves at the end of December amounted to USD. billion, the lowest level of 8 and down from USD. billion at the end of November. The central bank s international reserves reached their highest level of the year in April at USD9. billion. The reserves position in December was sufficient to cover 7. months of retained imports and was equal to the amount of short-term external debt. Indonesia Commences Offer Period for Savings Retail Bond The Government of Indonesia is targeting to raise IDR. trillion from the sale of savings retail bonds to be known as SBR-. The offer period commenced on January and will end on January. The bonds will have a maturity of years and carry an initial coupon rate of 8.% for the next months. The government is planning to offer issuances of retail bonds in 9, eight of which, including SBR-, will be structured as retail savings bonds while two will be structured as tradable bonds. The move is in line with government plans to offer investment alternatives to domestic investors....

4 Selected Government Security Yields -Month Selected LCY Government Security Yields Markets Close of January 9 Latest Closing Previous Day* basis point change from Previous Week* -Jan-9* US EU Japan PRC Hong Kong, China..... India Korea, Rep. of Malaysia Philippines Singapore Thailand..... Markets Close of January 9 -Year Selected LCY Government Bond Yields Latest Closing Previous Day* basis point change from Previous Week* -Jan-9* US EU Japan PRC Hong Kong, China India Indonesia Korea, Rep. of Malaysia Philippines Singapore Thailand Viet Nam EU = European Union, LCY =local currency, PRC = People s Republic of China, US = United States. Source: Based on data from Bloomberg, LP.

5 asianbondsonline.adb.org Benchmark Yield Curves LCY Government Bonds. US. EU. Japan China, People s Rep. of. Hong Kong, China 9. Indonesia Korea, Republic of. Malaysia 8. Philippines Singapore. Thailand. Viet Nam EU = European Union, LCY = local currency US = United States. Source: Based on data from Bloomberg.

6 - versus - Year Yield Spread Chart US EU Japan China, People's Rep. of Hong Kong, China -Jan-9 -Jan-9 8-Dec-8 Indonesia Korea, Rep. of Malaysia Philippines Singapore Thailand Viet Nam 7 basis points EU = European Union, US = United States. Source: Based on data from Bloomberg LP.

7 Policy Rate versus China, People s Rep. of Hong Kong, China Indonesia 7 8 -year Lending Rate..9 HKMA Base Rate day Reverse Repo Rate.. - The PRC uses the -year lending rate as one of its policy rates. The Hong Kong Monetary Authority maintains a Discount Window Base Rate. Bank Indonesia shifted its policy rate to the 7-day reverse repo rate effective 9 August. Source: Bloomberg, LP. Korea, Republic of Malaysia Philippines 7-day Repo Rate.7. c Overnight Policy Rate.. 7 Overnight Reverse Repo Rate..7 - The Bank of Korea shifted its policy rate from the overnight repurchase (repo) rate to the 7-day repo rate in March 8. Bank Negara Malaysia uses the overnight policy rate (OPR) as its policy rate. Bangko Sentral uses the Philippine overnight reverse repurchase agreement rate as one of its policy instruments. Thailand 8 Viet Nam -day Repo Rate.7 Refinancing Rate The Bank of Thailand replaced the -day repurchase rate with the -day repurchase rate in January 7 as its policy rate. The State Bank of Viet Nam uses a benchmark prime lending rate as its policy rate. 7

8 Mid spread in basis points asianbondsonline.adb.org Credit Default Swap Spreads and Exchange Rate Indexes Credit Default Swap Spreads Senior -Year* China, People's Rep. of Indonesia Korea, Rep. of Japan Malaysia Philippines Thailand Viet Nam * In USD and based on sovereign bonds Jan- Jun- Dec- May- Oct- Apr- Sep- Mar-7 Aug-7 Feb-8 Jul-8 Jan-9 Source: Bloomberg Exchange Rate Indexes (vis-à-vis USD, January 7=) China, People's Rep. of Indonesia Korea, Rep. of Malaysia Philippines Thailand Singapore 9 9 Viet Nam Source: AsianBondsOnline calculations based on Bloomberg data. Jan- Jun- Dec- May- Oct- Apr- Sep- Mar-7 Aug-7 Feb-8 Jul-8 Jan-9 8

9 Selected Debt Security Issuances (7 January 8) Auction Average Amount Offered Amount Issued Markets Date Type of Security Coupon (%) (LCY billion) (LCY billion) CN 9-Jan -year Treasury Bond year Treasury Bond Jan 9-day Treasury Bill... HK 8-Jan 9-day Exchange Fund Bills day Exchange Fund Bills ID 8-Jan -month Islamic Treasury Bills.,. -year Project-Based Sukuk 7.8.,8. 8,. -year Project-Based Sukuk ,. 7-year Project-Based Sukuk JP 8-Jan -month Treasury Discount Bills -.,.,9.9 -year Japanese Government Bonds..,.,. 9-Jan -month Treasury Discount Bills -.,., Jan -year Japanese Government Bonds KR 7-Jan 8-day Monetary Stabilization Bonds.7.. -year Korea Treasury Bonds MY 8-Jan.-year Government Investment Issues.... PH 7-Jan 9-day Treasury Bills day Treasury Bills... -day Treasury Bills Jan -year Treasury Bonds SG 8-Jan 8-day MAS Bills day MAS Bills... -Jan 8-day MAS Bills..7.7 TH 8-Jan 9-day Bank of Thailand Bills day Bank of Thailand Bills... 9-Jan 7.-year Government Bonds Jan.87-year Bank of Thailand Bonds Jan -day Bank of Thailand Bills.9.. VN 9-Jan 7-year Treasury Bonds... -year Treasury Bonds.,.,. -year Treasury Bonds.,.,. LCY = local currency, MAS = Monetary Authority of Singapore. Sources: Local market sources and Bloomberg, LP. 9

10 Selected Asia Data Releases ( January 8) Economy and Variable Release Date Historical Data Recent Trends Indonesia / /7:.% Exports from Indonesia declined.% year-on-year (y-o-y) in November Exports /7: 7.% follow ing.% y-o-y grow th in October. y-o-y, % /8:.% DEC /8:.% Indonesia / /7: Indonesia s trade deficit w idened to USD, million in November from Trade Balance /7: USD77 million in October. USD million /8: 77 DEC /8:, Philippines / /7: 8.% Remittances from overseas Filipino w orkers increased 8.7% y-o-y in Overseas Filipino Remittances /7:.% October, up from the.% y-o-y gain recorded in September. y-o-y, % 9/8:.% NOV /8: 8.7% Indonesia /7 /7:.% On December, Bank Indonesia s Board of Governors held steady the 7-Day Reverse Repo Rate /8:.% 7-day reverse repurchase rate at.%. % /8:.% 7 JAN /8:.% Singapore /7 /7:.% Singapore s non-oil domestic exports dropped.% y-o-y in November, a NODX /7:.9% reversal from the increase of.% y-o-y posted in October. y-o-y, % /8:.% DEC /8:.% Philippines /8 /7: - The Philippines recorded a balance of payments surplus of USD87 million in Balance of Payments /7: 97 November, rebounding from the USD8 million deficit posted in October. USD million /8: -8 DEC /8: 87 Japan /8 /7:.% Japan s consumer price inflation eased to.8% y-o-y in November from.% CPI /7:.% y-o-y in October. y-o-y, % /8:.% DEC /8:.8% Japan /8 /7:.% Based on preliminary estimates, Japan s industrial production rose.% y-o-y Industrial Production Final /7:.% in November follow ing grow th of.% y-o-y in October. y-o-y, % /8:.% NOV /8:.% China, People s Rep. / Q 7:.8% Real gross domestic product (GDP) grow th in the People s Republic of China GDP Q 7:.8% moderated to.% y-o-y in the third quarter of 8 from.7% y-o-y in the y-o-y, % Q 8:.7% second quarter. Q 8 Q 8:.% China, People s Rep. / /7:.% Industrial production grow th in the People s Republic of China eased to.% Industrial Production /7:.% y-o-y in November from.9% y-o-y in October. y-o-y, % /8:.9% DEC /8:.% Sources: AsianBondsOnline, Bloomberg LP, and Reuters.

11 News Articles: Sources for Further Reading Tip: Click on link to open a new browser (Acrobat Reader 8); for older versions right-click to open a new browser) The Philippines Sells USD. Billion of -Year Global Bonds The Republic of the Philippines Issues New -Year US Dollar-Denominated Global Bonds Bureau of the Treasury (8 January 9) Japan s Current Account Surplus Narrows in November; The Republic of Korea s Current Account Surplus Narrows in November Balance of Payments Statistics, November 8 (Preliminary) Ministry of Finance, Japan ( January 9) Balance of Payments during November 8 (preliminary) The Bank of Korea (8 January 9) The Philippines Trade Deficit Widens in November Highlights of the Philippine Export and Import Statistics: November 8 Philippine Statistics Authority ( January 9) Malaysia s Industrial Production Growth Slows in November Malaysia s Industrial Production Index (IPI) rose by. per cent in November 8 Department of Statistics Malaysia ( January 9) Consumer Price and Producer Price Inflation Slow in the PRC in December China's CPI up.9 pct in December Xinhua ( January 9) China's producer price up.9 pct in December Xinhua ( January 9) Foreign Reserves Up in Hong Kong, China and Indonesia in December; Bank Negara Malaysia s International Reserves Fall in December to Lowest Level of the Year Hong Kong s Latest Foreign Currency Reserve Assets Figures Released Hong Kong Monetary Authority (7 January 9) Official Reserve Assets Continue to Increase Bank Indonesia (8 January 9) International Reserves of Bank Negara Malaysia as at December 8 Bank Negara Malaysia (7 January 9) Indonesia Commences Offer Period for Savings Retail Bond SBR Resmi Ditawarkan Secara Online Januari 9 (in Bahasa) Directorate General of Budget Financing and Risk Management ( January 9) Government to offer retail bonds in planned issuances The Jakarta Post ( January 9) 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.