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05 July 2010 asianbondsonline.adb.orgKey Developments in Asian Local Currency Markets

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onsumer price inflation in Indonesia accelerated to 5.05% year-on-year (y-o-y) in June from 4.16% in May as the end of the harvest season put upward pressure on food prices. Consumer price inflation in the Republic of Korea (Korea) fell slightly to 2.6% y-o-y, following inflation of 2.7% in May. In Thailand, consumer price inflation eased to 3.3% y-o-y in June, compared with 3.5% in May, as consumer demand weakened. The State Bank of Viet Nam

kept its base interest rate at 8.0%, effective 1 July. Meanwhile, Bangko Sentral ng Pilipinas (BSP) said that interest rates in the Philippines remain appropriate and, therefore, may be left unchanged in the near future. BSP expects June inflation to range between 3.8% and 4.7%.

Exports from Indonesia grew 36.0% y-o-y in May, after climbing 42.4% in April, while imports rose 31.6% y-o-y. Indonesia reported a trade surplus amounting to USD2.47 billion for May. Thailand’s exports rose 42.5% y-o-y in May to USD16.4 billion, while imports rose 53.5% y-o-y to reach USD14.14 billion. Thailand reported a trade surplus of USD2.3 billion in May after posting a trade deficit of USD190 million in April.

Korea’s current account surplus expanded to a 6-month high of USD3.83 billion in May from a revised USD1.42 billion in April. In the Philippines, BSP reported that external debt outstanding as of 31 March stood at USD55.4 billion, up 5.6% y-o-y.

Japan’s industrial production in May rose 20.2% from the previous year while the Manufacturing Purchasing Managers Index (PMI) was at 53.9 in June, which was near a 4-year peak of 54.7 reached in May. Meanwhile, the People’s Republic of China’s (PRC) PMI for June stood at 52.1, down from 53.9 in May. The PRC upgraded its 2009 gross domestic product (GDP) growth rate last week from 8.7% to 9.1%.

Last week, Bank of China (Hong Kong) raised HKD2.5 billion from a four-tranche bond sale. Malaysia’s Asian Pac Holdings subsidiary Syarikat Kapasi sold MYR30 million worth of 3-years bonds. In the Philippines, East West Banking Corporation raised PHP1.5 billion from the sale of 10.5-year lower tier 2 notes. Finally, Thailand’s Pruksa Real Estate sold a total of THB2.5 billion in bonds.

In Indonesia, Integrated media company Media Nusantara Citra plans to issue USD300–USD400 million worth of bonds, while securities company Kresna Graha Securindo plans to issue IDR150–IDR200 billion bonds. In Malaysia, Industrial Bank of Korea plans to sell

MYR300 million worth of bonds. Singapore’s Public Utilities Board will sell SGD400 million worth of 12-year bonds in mid-July and Singapore Airlines is set to issue SGD500 million of 10-year bonds on 9 July.

Government bond yields fell for all maturities in Hong Kong, China and Viet Nam, as well as for most maturities in the PRC, Korea, Malaysia, the Philippines, and Singapore. Yields rose for all maturities in Indonesia while yield movements were mixed in Thailand. Yield spreads between 2- and 10-year maturities widened in Thailand and Viet Nam, while spreads narrowed in most other emerging East Asian markets.

What’s New: An update on bond market developments in the PRC for 1Q10 is now available in the market summary section of the AsianBondsOnline website.

CAsia Bond Monitor March 2010 read more

10-Year Selected LCY Government Security Yields Close of 05 July 2010 basis point change from

Previous Day* Markets Latest Closing Previous Week* 1-Jan-10*

Selected Benchmark Yield Curves - Local Currency Government Bonds

Policy Rate versus Inflation Rate Charts

Government Security Yields

Credit Default Swap Spreads & Exchange Rate IndexesSelected Debt Security Issuances Selected Asia Data Releases

2-versus-10 Yield Spread Chart

US 2.98 3.00 -13.08 -85.80EU 2.58 1.70 -2.80 -80.40Japan 1.10 3.40 -4.70 -19.20PRC 3.28 -2.00 -12.00 -36.00Hong Kong, China 2.29 0.50 -16.60 -28.80India 7.54 0.50 -10.70 -3.90Indonesia 8.24 -12.90 19.80 -182.10Malaysia 3.94 -0.50 -3.10 -34.30Korea, Rep. of 4.91 -1.00 -8.00 -48.00Philippines 7.65 -15.00 -17.50 -35.00Singapore 2.37 1.00 -11.00 -29.00Thailand 3.15 0.00 0.70 -103.80Viet Nam 11.55 -0.90 -2.50 10.30

-13.08

-2.80

-4.70

-12.00

-16.60

-10.70

19.80

-3.10

-8.00

-17.50

-11.00

0.70

-2.50

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http://www.asianbondsonline.adb.org/china/market_summary.php?src=wdhhttp://www.asianbondsonline.adb.org/documents/abm_mar_2010.pdf?src=wdh

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DEBT HIGHLIGHTSASIANBONDSONLINE

Summary Text of News Articles

Consumer Price Inflation Climbs in Indonesia, Slows in Korea and Thailand; Policy Rate Kept at 8.0% in Viet Nam; Interest Rates Kept Steady in the Philippines

........................................................................................................................................ Consumer price inflation in Indonesia climbed for a third consecutive month in June to 5.05% year-on-year (y-o-y) as the end of the harvest season reduced food supplies and put upward pressure on food prices. June inflation, however, is still within Bank Indonesia's target inflation range of between 4.0% and 6.0% for the whole of 2010. On a month-on-month (m-o-m) basis, consumer price inflation rose to 0.97% from 0.29% m-o-m in May.

In the Republic of Korea (Korea), consumer price inflation stood at 2.6% y-o-y in June compared with 2.7% in May. On a y-o-y basis, most product categories registered a price increase, led by transportation and food/non-alcoholic beverages, which increased 4.9% and 4.1% y-o-y, respectively. On a m-o-m basis, consumer prices fell 0.2% in June, as prices for food/non-alcoholic beverages, transport, recreation/culture, and furnishings/household equipment dropped by 1.6%, 0.4%, 0.3%, and 0.1%, respectively.

In Thailand, consumer price inflation eased to 3.3% y-o-y in June, compared with 3.5% y-o-y in May, on the back of weakened consumer demand. On a m-o-m basis, consumer prices rose 0.26% in June, slightly higher than the 0.20% increase in May as prices of fresh food and consumer goods increased. Food prices increased 6.1% y-o-y, mainly driven by a sharp rise in the price of fruits and vegetables.

The State Bank of Viet Nam (SBV) decided to maintain its base interest rate at 8.0% effective 1 July. The refinancing rate and discount rate will also be kept at 8.0% and 6.0%, respectively. SBV kept rates steady in July as consumer price inflation eased 8.69% y-o-y in June from 9.05% in May.

Meanwhile, Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco said interest rates remain appropriate given balanced inflation risks. BSP’s key policy interest rates have remained at 4.0% for overnight borrowing and 6.0% for the overnight lending facility since July 2009. Interest rates on special deposit accounts were also left unchanged. Furthermore, BSP sees June inflation of between 3.8% and 4.7% due to higher tuition fees and price increases on certain food items and petroleum products. June inflation, which will be released on 2 July, is likely to fall within BSP’s 3.5%–5.5% target range for the year. Average inflation for the first 5 months of the year has been 4.3%.

For trends in policy and interest rates in Indonesia, refer to this link: http://www.asianbondsonline.adb.org/indonesia/data/marketwatch.php?code=policy_rate_and_inflation_trends

For trends in policy and interest rates in Korea, refer to this link: http://www.asianbondsonline.adb.org/korea/data/marketwatch.php?code=policy_rate_and_inflation_trends

For trends in policy and interest rates in Thailand, refer to this link: http://asianbondsonline.adb.org/thailand/data/marketwatch.php?code=policy_rate_and_inflation_trends

For trends in policy and interest rates in the Philippines, refer to this link: http://www.asianbondsonline.adb.org/philippines/data/marketwatch.php?code=policy_rate_and_inflation_trends

For trends in policy and interest rates in Viet Nam, refer to this link: http://www.asianbondsonline.adb.org/vietnam/data/marketwatch.php?code=policy_rate_and_inflation_trends

Indonesia and Thailand Record Trade Surpluses in May ........................................................................................................................................ Indonesia's exports grew 36.0% y-o-y in May after climbing 42.4% in April. Oil and gas exports expanded 99.7% y-o-y, while non-oil and gas exports rose 27.0%. Imports also expanded 31.6% y-o-y in May, substantially lower than the 67.5% growth recorded in April. Total exports were valued at USD12.52 billion and imports at USD10.25 billion, resulting in a USD2.47 billion trade surplus in May.

Thailand’s exports climbed 42.5% y-o-y in May—from 34.7% in April—the highest growth rate since July 2008. Thai exports in May had a total value of USD16.4 billion. The expansion was led by 43.4% y-o-y growth in the export of manufactured products, followed by 41.7% growth in agricultural products, 13.3% in fisheries products, and 3.2% growth in all other sectors. Imports also expanded 53.5% y-o-y to stand at USD14.14 billion in May, compared with 44.0% y-o-y growth and imports valued at USD14.02 billion in April. Thailand’s trade surplus stood at USD2.3 billion in May after posting a trade deficit of USD190 million in April.

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

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Indonesia and Thailand Record Trade Surpluses in May (cont…) ........................................................................................................................................ For statistics on Indonesia’s macroeconomic indicators, refer to this link: http://asianbondsonline.adb.org/indonesia/data/macroeconomic_credit.php

For statistics on Thailand’s macroeconomic indicators, refer to this link: http://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php

Korea’s Current Account Surplus Expands in May; External Debt Up in the Philippines through March

........................................................................................................................................ The current account surplus of the Republic of Korea (Korea) expanded to a 6-month high of USD3.83 billion in May from a revised USD1.42 billion in April. The trade surplus narrowed to USD4.18 billion in May from USD5.12 billion in the previous month. The deficits for the services and current transfers accounts, however, fell to USD0.64 billion (from USD1.85 billion in April) and US0.01 billion (from USD0.47 billion in April), respectively. Meanwhile, the income account shifted to a surplus of USD0.3 billion in May from a deficit of USD1.38 billion in April.

In the Philippines, the Bangko Sentral ng Pilipinas (BSP) reported that the registered outstanding external debt as of 31 March stood at USD55.4 billion, up by 5.6% y-o-y and 4.1% from end-December 2009. Total public sector external debt grew 2.0% to USD42.6 billion from the previous quarter due to the net new borrowing of USD925 million to finance development projects and other government requirements. Meanwhile, private sector external debt rose 12.0% quarter-on-quarter (q-o-q) to USD12.8 billion due to net loans of USD1.5 billion. The external debt ratio was estimated at 33.2% of gross domestic product (GDP). About 90.6% of the total external debt portfolio consists of medium- to long-term maturities, with the weighted average maturity of medium- to long-term debt equal to 20 years.

For statistics on Korea's current account, refer to this link: http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php

For statistics on Philippines' external debt, refer to this link: http://asianbondsonline.adb.org/philippines/data/macroeconomic_credit.php

Japan’s Industrial Production Up; Manufacturing Expansion Eases in Japan and the PRC ........................................................................................................................................ Japan’s industrial production in May rose 20.2% y-o-y as the production of transport equipment, paper products, and petroleum and coal products decreased. Commodities such as large passenger cars, semiconductor products, machinery, and the production of flat-panel display products also contributed to the decline in May. Shipments in May showed an increase of 21.0% y-o-y, while inventories fell 0.8%. The Ministry of Economy, Trade, and Industry (METI) said that industrial production in Japan continues to show "upward movement," as the inventory ratio still posted positive figures. According to the Survey of Production Forecast in Manufacturing, production is expected to increase 0.4% in June and 1.0% in July.

Meanwhile, Japan’s Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) was at 53.9 in June, near its 4-year peak of 54.7 reached in May, as the index for new export orders fell in June. However, the export orders index remained above the 50 threshold for 13 months, indicating that external demand continues to grow.

In the People’s Republic of China’s (PRC), the China Federation of Logistics and Purchasing reported that the country’s Purchasing Managers’ Index (PMI) for June stood at 52.1, down from 53.9 in May. The PRC’s PMI has been above 50 for the past 16 months.

A sub-index measuring output dropped to 55.8 in June compared with 58.2 in the previous month, while the sub-index for new orders fell to 52.1 in June from 54.8 in May. An input price sub-index fell to 51.3 in June, compared with 58.9 in May, reflecting weakness in demand and the declining costs of some commodities.

The PRC’s PMI data is based on a survey of purchasing and supply managers of more than 700 companies across the country.

For statistics on Japan’s macroeconomic indicators, refer to this link: http://asianbondsonline.adb.org/japan/data/macroeconomic_credit.php

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http://asianbondsonline.adb.org/indonesia/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/thailand/data/macroeconomic_credit.php?sr=wdhhttp://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php?src=wdhhttp://asianbondsonline.adb.org/philippines/data/macroeconomic_credit.php?src-wdhhttp://asianbondsonline.adb.org/japan/data/macroeconomic_credit.php?src=wdh

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Bond Issuances in Hong Kong, China; Malaysia; the Philippines; and Thailand ........................................................................................................................................ Last week, Bank of China (Hong Kong) raised HKD2.5 billion from a four-tranche bond sale. The bank sold a HKD1-billion, fixed-rate, 1-year issue at 1.1%; a HKD500-million, 1-year issue at 0.96%; HKD700-million, 1-year paper at 29 basis points over the 3-month Hibor; and a HKD300-million, 5-year note at 2.6%.

Malaysia’s Asian Pac Holdings subsidiary Syarikat Kapasi sold MYR30 million worth of 3-year bonds—the first tranche of the company’s MYR200-million Guaranteed Commercial Papers/Medium-Term Notes (CP/MTN) program. The issue pays a coupon of 3.8% and enjoys an AAA rating due to the guarantee extended by state-owned Danajamin Nasional Bhd. (Danajamin). Danajamin provides financial guarantee insurance for securities issued by investment grade companies, which are defined as rated BBB or higher by a Malaysian rating agency. To date, Danajamin has already approved MYR2.9 billion worth of guarantees for eight companies and is currently evaluating MYR3.5 billion worth of bond guarantees for another 11 companies.

In the Philippines, East West Banking Corporation raised PHP1.5 billion from the sale of lower tier 2 notes. The issue has a tenor of 10.5 years, with a customary optional redemption after 5.5 years. It will bear a fixed-rate of 7.5% per annum to be paid semi-annually for the first 5 years and 6 months. Proceeds of the sale will be used to finance the company’s expansion plans.

Also, Thailand’s Pruksa Real Estate sold a total of THB2.5 billion of bonds that were seven times oversubscribed by individuals and institutional investors. The bond issue comprised THB1.5 billion of 3-year bonds and THB1 billion of 5-year bonds, with coupon rates of between 3.0% and 3.75%. Proceeds will be used to boost Pruksa’s working capital.

Planned Bond Issuances from Indonesia, Malaysia, and Singapore ........................................................................................................................................ Two Indonesian corporate firms announced plans to issue bonds in the second half of the year. The integrated media company PT Media Nusantara Citra disclosed that it will proceed with its plan to issue USD300–USD400 million worth of bonds in the fourth quarter of this year. The proceeds from the bond issue will be used to refinance the company's maturing debt and to finance capital expenditures for its subsidiaries. Also, securities company PT Kresna Graha Securindo Tbk announced plans to issue IDR150–IDR200 billion in bonds in the second half of the year.

In Malaysia, Industrial Bank of Korea plans to sell MYR-denominated bonds worth MYR300 million. The planned bond issue will have a 3-year maturity and will be under the bank’s medium-term notes program.

Singapore’s Public Utilities Board will sell SGD400 million worth of 12-year bonds in mid-July. The notes will carry a coupon of 3.012% and will mature on 12 July 2022. Also, Singapore Airlines will issue SGD500 million worth of 10-year bonds on 9 July. The notes, priced at 3.22%, will be issued under the airline’s SGD1-billion, medium-term note program set up in 2003. The bond issue will be the first since December 2001 when the company raised SGD900 million from the sale of a 10-year bond.

http://www.asianbondsonline.adb.org/indonesia/structure/participants/rating_agencies.php?src=wdh

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Selected Government Security Yields ip: Zoom-in on the table using the Acrobat zoom tool

3-Month Selected LCY Government Security Yields

10-Year Selected LCY Government Bond Yields

T

PreviousDay*

PreviousWeek* 1-Jan-10*

US 0.16 -0.50 3.35 10.45EU 0.22 -2.60 -4.40 -14.80Japan 0.12 0.00 0.00 -1.00PRC 2.00 0.00 57.00 75.00Hong Kong, China 0.47 -15.00 -8.00 40.00India 5.25 -5.00 -5.00 195.00Malaysia 2.54 0.00 -0.10 53.10Korea, Rep. of 2.11 0.00 3.00 -23.00Philippines 3.96 0.00 -4.00 -10.74Singapore 0.32 0.00 2.00 -23.00Thailand 1.22 0.83 1.63 8.00

basis point change fromMarkets Latest Closing

3.35

-4.40

0.00

57.00

-8.00

-5.00

-0.10

3.00

-4.00

2.00

1.63

Close of 02 July 2010

Latest ClosingPrevious

Day*PreviousWeek* 1-Jan-10*

US 2.98 3.00 -13.08 -85.80EU 2.58 1.70 -2.80 -80.40Japan 1.10 3.40 -4.70 -19.20PRC 3.28 -2.00 -12.00 -36.00Hong Kong, China 2.29 0.50 -16.60 -28.80India 7.54 0.50 -10.70 -3.90Indonesia 8.24 -12.90 19.80 -182.10Malaysia 3.94 -0.50 -3.10 -34.30Korea, Rep. of 4.91 -1.00 -8.00 -48.00Philippines 7.65 -15.00 -17.50 -35.00Singapore 2.37 1.00 -11.00 -29.00Thailand 3.15 0.00 0.70 -103.80Viet Nam 11.55 -0.90 -2.50 10.30

basis point change fromMarkets

-13.08

-2.80

-4.70

-12.00

-16.60

-10.70

19.80

-3.10

-8.00

-17.50

-11.00

0.70

-2.50

Close of 02 July 2010

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 tool T

China, People’s Rep. of

1.00

1.50

2.00

2.50

3.00

3.50

4.00

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

Time to maturity (years)

Yie

ld (%

)

02-Jul-10 25-Jun-10 18-Jun-10

Hong Kong, China Indonesia

Source: Based on data from Bloomberg.

JapanEUUS

Viet NamThailandSingapore

PhilippinesMalaysiaKorea, Republic of

0.0

0.5

1.0

1.5

2.0

2.5

3.0

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


Yie

ld (%

)

6.0

7.0

8.0

9.0

10.0

11.0

12.0

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


Yie

ld (%

)

02-Jul-10 25-Jun-10 18-Jun-10 02-Jul-10 25-Jun-10 18-Jun-10

2.00

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


Yie

ld (%

)

02-Jul-10 25-Jun-10 18-Jun-10

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


Yie

ld (%

)

1.8

2.3

2.8

3.3

3.8

4.3

4.8

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


Yie

ld (%

)

02-Jul-10 25-Jun-10 18-Jun-1002-Jul-10 25-Jun-10 18-Jun-10

0.3

0.8

1.3

1.8

2.3

2.8

3.3

3.8

1 4 7 10 13 16 19 22


Yie

ld (%

)

02-Jul-10 25-Jun-10 18-Jun-10

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


Yie

ld (%

)

9.810.0

10.3

10.5

10.811.0

11.3

11.5

11.812.0

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17


Yie

ld (%

)


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


Yie

ld (%

)

02-Jul-10 25-Jun-10 18-Jun-10

0.00.30.50.81.01.31.51.82.02.32.5

0 4 8 12 16 20 24 28 32


Yie

ld (%

)

0.0

0.5

1.0

1.5

2.0

2.53.0

3.54.0

4.5

0 5 10 15 20 25 30


Yie

ld (%

)


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2-versus-10 Yield Spread Chart ip: Zoom-in on the table using the Acrobat zoom tool T

Yield Spread between the Two- and Ten-Year Government Bonds

0 50 100 150 200 250 300

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-Jul-10

25-Jun-10

18-Jun-10

Source: Based on data from Bloomberg.

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Policy Rate versus Inflation Rate Charts ip: Zoom-in on the table using the Acrobat zoom tool T

China, People’s 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.

1.51Inflation Rate

5.25

RepurchaseCut-off Yield

-2

0

2

4

6

8

10

12

14

Jan-05 Nov-05 Oct-06 Sep-07 Aug-08 Jul-09 Jun-10

Inflation Rate

2.5

0.5

HKMA Base Rate

-4

-2

0

2

4

6

8

Jan-05 Oct-05 Jul-06 May-07 Feb-08 Nov-08 Sep-09 Jun-10

5.05Inflation Rate

6.5BI Rate

0

2

4

6

8

10

12

14

16

18

20

Jan-05 Oct-05 Jul-06 Apr-07 Feb-08 Nov-08 Aug-09 Jun-10

2.6

Inflation Rate

2.07-Day RepoRate

0

2

4

6

8


1.6

Inflation Rate

2.5

Overnight Policy Rate

-4

0

2

4

6

8

10


-2

3.30

Inflation Rate

1.25

1-Day RepoRate

-6

-4

-2

0

2

4

6

8

10


Inflation Rate

8.69

Prime Lending Rate

8.0

03

6

912

15

1821

2427

30

Jan-05 Oct-05 Jul-06 Apr-07 Feb-08 Nov-08 Aug-09 Jun-10

3.1

1-yearLending Rate

Inflation Rate

5.31

-4

-2

0

2

4

6

8

10

Jan-05 Oct-05 Jul-06 May-07 Feb-08 Nov-08 Sep-09 Jun-10

Inflation Rate

4.3

OvernightReverse Repo

Rate

4.0

-2

0

2

4

6

8

10

12

14


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Credit Default Swap Spreads & Exchange Rate Indexes ip: Zoom-in on the table using the Acrobat zoom tool T

Credit Default Swap Spreads - Senior 5-year*

0

200

400

600

800

1000

1200

1400

Jan-07 Jul-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-100

200

400

600

800

1000

1200

1400 China, People's Rep. of

Hong Kong, China

Korea, Rep. of

Japan

Malaysia

Philippines

Thailand

Indonesia

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

Mid

spre

ad in

bas

is po

ints

* In USD currency and based on sovereign bonds Source: Thomson DataStream

Source: ADB-OREI staff calculations based on Bloomberg data.

50Jan-07 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10

50

60

70

80

90

100

110

120

130

60

70

80

90

100

110

120

130China, People's Rep. of

Indonesia

Korea, Rep. of

Malaysia

Philippines

Thailand

Singapore

Viet Nam

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Selected Debt Security Issuances (Week of June 28 – July 2, 2010) ip: Zoom-in on the table using the Acrobat zoom tool T

PRC 29-Jun 1-Year PBOC Bills 2.09 55.0 55.01-Jul 3-year PBOC Bonds 2.68 22.0 22.0

HK 29-Jun 91-day Exchange Fund Bills 0.67 27.9 27.9182-day Exchange Fund Bills 0.64 9.0 9.0

JP 29-Jun 3-month Treasury Discount Bills 0.12 5,100.0 4,795.1KR 28-Jun 28-day Monetary Stabilization Bonds 2.15 3,000.0 3,000.0

91-day Monetary Stabilization Bonds 2.21 1,300.0 1,300.020-year Treasury Bonds 5.22 800.0 900.0

MY 28-Jun 91-day BNM Islamic Notes 2.68 1.0 0.5266-day BNM Notes 2.75 1.5 0.5

29-Jun 3-year Treasury Bonds 3.22 3.0 3.030-Jun 62-day BNM Islamic Notes 2.65 0.5 0.5

91-day BNM Notes 2.69 1.0 1.0180-day BNM Notes 2.71 1.0 1.0

PH 28-Jun 91-day Treasury Bills 3.93 1.5 1.5182-day Treasury Bills 4.16 3.0 3.0364-day Treasury Bills 4.62 3.5 2.7

SG 28-Jun 91-day Treasury Bills 0.27 3.6 3.62-year Treasury Bonds 0.49 2.5 2.5

TH 28-Jun 28-day Treasury Bills 1.15 2.0 2.091-day Treasury Bills 1.19 4.0 4.0182-day Treasury Bills 1.30 4.0 4.0

29-Jun 27-day BOT Bills 1.17 20.0 20.090-day BOT Bills 1.21 15.0 15.0181-day BOT Bills 1.34 15.0 11.130.7-year Government Bonds 3.88 3.0 3.0

30-Jun 14-day BOT Bills 1.18 50.0 50.0Sources: Local market sources and Bloomberg, LP.

Coupon (in %)

Amount Offered LCY Billions

Amount Issued LCY BillionsMarkets Auction Date Type of Security

Average Yield (%)

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Selected Asia Data Releases (6 - 12 July 2010) ip: Zoom-in on the table using the Acrobat zoom tool T

Country Variable Release DateHistorical

DataRecent Trends

05/09: –0 .6%06/09: 0.2%04/10: 12.8%05/10: 12.4%

Housing prices in the People’s Republic of China (PRC) rose 12.4% y-o-y in May, compared with 12.8% in the previous month.

PhilippinesForeign Reservesy-o-y %JUN

07/07

SingaporeForeign ReservesUSD billionJUN

JapanBank Lendingy-o-y %JUN

JapanCurrent Account TotalJPY billionMAY

07/08

07/06 to 07/10

04/09: 13.4%05/09: 10.2%03/10: –0.9%04/10: 6.2%

07/08

05/09: –23.8%06/09: –0.5%04/10: 23.0%05/10: 7.1%

Hong Kong, ChinaForeign Currency ReservesUSD billionJUN

Viet NamDomestic Vehicle Salesy-o-y %JUN

07/07

PhilippinesCPIy-o-y %JUN

07/06 05/09: 3.3%06/09: 1.5%04/10: 4.4%05/10: 4.3%

07/07

The Philippines’ consumer price inflation eased to 4.3% year-on-year (y-o-y) in May. The Bangko Sentral ng Pilipinas (BSP) said inflation in June may fall within the range of 3.8%–4.7%.

05/09: 3.1%06/09: 2.6%04/10: –1.8%05/10: –2.0%

PhilippinesBank Lendingy-o-y %MAY

07/07

05/09: 205.106/09: 207.004/10: 259.205/10: 256.2

Viet Nam’s vehicle sales reached 7.1% y-o-y in May after climbing 23.0% y-o-y in April.

Hong Kong, China’s foreign currency reserves reached USD256.2 billion in May, slightly lower than USD259.2 billion in April.

Bank lending in the Philippines jumped 6.2% y-o-y in April from –0.9% y-o-y in March.

The Philippines’ foreign reserves reached USD47.69 billion in May. BSP announced that foreign reserves may hit USD50 billion this year, compared with the government’s target of USD49 billion.

Japan’s bank lending fell 2.0% y-o-y in May.

05/09: 39.5906/09: 39.4904/10: 46.9405/10: 47.69

Singapore’s foreign reserves stood at USD198.4 billion in May, slightly lower than the USD203.4 billion posted in April.

05/09: 171.806/09: 173.204/10: 203.405/10: 198.4

04/09: 660.605/09: 1,311.403/10: 2,534.204/10: 1,242.1

Bank Negara Malaysia (BNM) increased its overnight policy rate by 25 basis points to 2.50% on 13 May, which was the second time it has raised the policy rate this year. The consensus estimate is for BNM to increase the policy rate again in July to 2.75%.

Japan’s current account posted a surplus of JPY1.242 trillion in April from JPY2.534 trillion in March.

04/09: 10.6%05/09: 9.9%03/10: 9.3%04/10: 9.4%

The Republic of Korea’s (Korea) M2 money supply growth rose slightly to 9.4% y-o-y in April from 9.3% in March.

MalaysiaOvernight Policy Rate%JUL

07/08 06/09: 2.0%07/09: 2.0%05/10: 2.5%06/10: 2.5%

MalaysiaIndustrial Productiony-o-y %MAY

07/08 04/09: –11.8%05/09: –11.0%03/10: 14.2%04/10: 10.1%

Industrial production in Malaysia rose for the fifth consecutive month in April, posting 10.1% y-o-y growth in April, due to the increased output of electronics and power companies.

Republic of KoreaM2 Money Supplyy-o-y %MAY

07/08

People’s Republic of ChinaTrade BalanceUSD billion

07/10 05/09:13.39 06/09: 8.34 04/10: 1.68

The PRC’s trade balance climbed to USD19.53 billion in May from USD1.68 billion in March.

Republic of Korea7-Day Repo Rate%JUL

07/09 06/09: 2.0%07/09: 2.0%05/10: 2.0%06/10: 2.0%

Korea’s 7-day repurchase rate has stayed at a record-low of 2.0% since February 2009.

People’s Republic of ChinaHousing Prices%JUN

07/10 to 07/12

Source: AsianBondsOnline, Bloomberg LP, and Reuters.

JUN 05/10: 19.53

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News Articles: Sources for Further Reading

Consumer Price Inflation Climbs in Indonesia while Slows in Korea and Thailand; Policy Rate Kept at 8% in Viet Nam; Interest Rates Remain Appropriate in the Philippines

• Indonesia Inflation Accelerated a Third Month in June Bloomberg LP (01 July 2010) • Consumer Price Index in June 2010 Statistics Korea (01 July 2010) • June inflation rate eases slightly to 3.3% Bangkok Post (02 July 2010) • BSP sees June inflation at 3.8-4.7% Malaya (29 June 2010) • Interest rates appropriate, says Tetangco Philippine Star (29 June 2010) • SBV retains base rate at 8pct Intellasia (25 June 2010)

Indonesia and Thailand Record Trade Surplus in May

• BPS: Indonesia's exports up 4.06% in May Antara News (01 July 2010)

• Press Release on Economic and Monetary Conditions for May 2010 Bank of Thailand (30 June 2010)

The Republic of Korea’s Current Account Surplus Expands in May; External Debt Up in the Philippines as of March

• Balance of Payments Trends During May 2010 The Bank of Korea (29 June 2010)

• South Korea Current-Account Surplus Widens in Sign of Resilience to Europe Bloomberg (28 June 2010)

• External Debt Increases; Debt Ratios Remain Prudent in First Quarter of 2010 Bangko Sentral ng Pilipinas (29 June 2010)

• Foreign Debt Climbs 5.6% to $55.4 billion in First Quarter Philippine Star (30 June 2010)

Japan’s Industrial Production Up; Japan and PRC PMIs Reflect Manufacturing Slowdown

• Preliminary Report on Indices of Industrial Production (May 2010) Ministry of Economy, Trade and Industry (29 June 2010)

• Japan June manufacturing PMI falls but near 4-yr high Yahoo! News (30 June 2010)

• China's PMI of manufacturing sector falls to 52.1% in June Xinhua (01 July 2010)

• China Manufacturing Slows for Second Month, PMI Shows Bloomberg (01 July 2010)

Bond Issuances in Malaysia, the Philippines and Thailand

• Kapasi’s bonds get 3.8% coupon rate The Star (30 June 2010)

• Danajamin evaluating RM3.5b bond guarantees Business Times (01 July 2010)

• EastWest Bank launches P1.5-billion Lower Tier 2 notes issue Philippine Star (29 June 2010)

• Pruksa bonds sold out The Nation (28 June 2010) Planned Bond Issuance from Indonesia, Malaysia and Singapore

• Indonesia's MNC says $300-$400m bond issue planned for Q4 Yahoo News (28 June 2010)

• Kresna to issue IDR200 billion bonds Bisnis Indonesia (30 June 2010)

• S. Korean bank may issue ringgit bonds Business Times (01 July 2010)

• New Issue-PUB issues S$400 mln 12yr bond Reuters (29 June 2010)

• Singapore Airlines Plans First Bond Sale for a Decade Bloomberg Businessweek (29 June 2010)

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http://www.businessweek.com/news/2010-06-29/singapore-airlines-plans-first-bond-sale-for-a-decade.htmlhttp://www.reuters.com/article/idUSSGE65S0ES20100629http://www.btimes.com.my/Current_News/BTIMES/articles/20100701000240/Article/http://www.bisnis.com/servlet/page?_pageid=127&_dad=portal30&_schema=PORTAL30&vnw_lang_id=1&ptopik=ENG&cdate=30-JUN-2010&inw_id=740984http://asia.news.yahoo.com/rtrs/20100628/tbs-mnc-indonesia-b246348.htmlhttp://www.nationmultimedia.com/home/2010/06/24/business/Pruksa-bonds-sold-out-30132334.htmlhttp://www.philstar.com/Article.aspx?articleId=588574&publicationSubCategoryId=66http://www.btimes.com.my/Current_News/BTIMES/articles/jdana/Article/http://biz.thestar.com.my/news/story.asp?file=/2010/6/30/business/6574287&sec=businesshttp://noir.bloomberg.com/apps/news?pid=20601087&sid=aDIJroH3jif8&pos=1http://news.xinhuanet.com/english2010/china/2010-07/01/c_13378732.htmhttp://asia.news.yahoo.com/rtrs/20100630/tbs-japan-economy-pmi-9a48464.htmlhttp://www.meti.go.jp/english/statistics/tyo/iip/index.htmlhttp://www.philstar.com/Article.aspx?articleId=588886&publicationSubCategoryId=66http://www.bsp.gov.ph/publications/media.asp?id=2358http://www.bloomberg.com/news/2010-06-29/south-korea-current-account-surplus-widens-in-sign-of-resilience-to-europe.htmlhttp://eng.bok.or.kr/contents/total/eng/boardView.action?menuNaviId=634&boardBean.brdid=7153&boardBean.menuid=634&boardBean.rnum=2http://www.bot.or.th/Thai/EconomicConditions/Thai/Documents/PressEng_May10.pdfhttp://www.antaranews.com/en/news/1277970152/bps-indonesias-exports-up-406-in-mayhttp://74.53.24.87/news/articles/finance/111297746.shtmlhttp://www.philstar.com/Article.aspx?articleId=588562&publicationSubCategoryId=66http://www.malaya.com.ph/06292010/busi4.htmlhttp://www.bangkokpost.com/business/economics/184507/june-inflation-rate-eases-slightly-to-3-3http://kostat.go.kr/eboard_faq/BoardAction.do?method=view&catgrp=eng2009&catid1=g01&catid2=g01b&catid3=g01ba&catid=g01ba&board_id=102&seq=116&num=116http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=avSWARJ00Jy4

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