Local currency (LCY) government bond yields in emerging East Asia declined in recent months as concerns about a September rate hike by the United States (US) Federal Reserve eased and inflationary pressures remained largely muted, according to the Asian Development Bank’s latest Asia Bond Monitor. While bond markets have stabilized, risks remain from lower market liquidity and slowing economic growth. At end September, the region’s LCY bond market expanded to US$8.8 trillion from US$8.6 trillion at the end of June. The report also presented the results of the 2015 AsianBondsOnline Annual Bond Market Liquidity Survey. For a copy of the full report, please click on the following link: https://asianbondsonline.adb.org/documents/abm_nov_2015.pdf.
Hong Kong’ China’s consumer prices rose 2.4% year-on-year (y-o-y) in October, up from a 2.0% y-o-y hike in September, led by price increases in food and housing. Consumer price inflation in Japan climbed 0.3% y-o-y, after remaining unchanged in September, buoyed by faster growth in food prices. In Singapore, consumer prices fell 0.8% y-o-y in October, the 12th consecutive month of y-o-y decline. Viet Nam’s consumer price inflation rose 0.3% y-o-y in November after remaining unchanged in October.
Real gross domestic product (GDP) growth in the Philippines rose to 6.0% y-o-y in 3Q15 from 5.8% y-o-y in 2Q15, buoyed by faster growth in domestic demand and the services sector. Singapore’s real GDP growth slipped to 1.9% y-o-y in 3Q15 from 2.0% y-o-y in 2Q15, due to a larger contraction in manufacturing output and slower growth in the construction, information and communications, and financial sectors.
Hong Kong, China’s merchandise exports fell 3.7% y-o-y in October after posting a 4.6% y-o-y decline in September. Imports of goods declined 8.5% y-o-y in October after recording a 7.6% y-o-y decrease in September. Philippine exports of goods plunged 15.5% y-o-y in September after a 6.3% y-o-y fall in August, while merchandise import growth accelerated to 6.7% y-o-y in September from 5.7% y-o-y in August.
Singapore’s manufacturing production dropped 5.4% y-o-y in October, the ninth consecutive month of y-o-y decline, amid output reductions in electronics, biomedical manufacturing, precision engineering, and transport engineering.
Local currency corporate debt issuance in the Republic of Korea contracted to KRW9.6 trillion in October from KRW10.5 trillion in September, due to monthly decreases in the issuance of asset-backed securities, bank debentures, and nonfinancial corporate bonds.
The Bank of East Asia in Hong Kong, China priced a US$650 million perpetual bond to yield 5.5% last week. The Korea Development Bank priced a 3-year dim sum bond worth CNY1.3 billion to yield 4.2% yield last week.
Local currency government bond yields fell for all tenors in Indonesia as inflation is expected to come within Bank Indonesia’s target inflation range. Yields also fell for all tenors in Singapore on slowing economic growth, Yields fell for most tenors in Malaysia, Thailand, and the Philippines while it rose for all tenors in the Republic Korea and for most tenors in Viet Nam. Yields were mixed in Hong Kong, China. The spread between the 2- and 10-year tenors widened for most markets except for Hong Kong, China; the Republic of Korea; and Thailand.