27 June 2011 asianbondsonline.adb.org

……………………………………………………………………………………………………………..……………..……

Key Developments in Asian Local Currency Markets

1

onsumer price inflation in Hong Kong, China accelerated to 5.2% year-on-year (y-o-y) in May from 4.6% in April. The rise in consumer prices mainly reflected higher food prices and a rise in residential rents. Prices for alcoholic drinks and tobacco rose 19.8% due to a one-time duty increase, food prices rose 7.0%, and utility rates rose 7.9%. Meanwhile, consumer price inflation in Singapore remained steady at 4.5% y-o-y in May, while consumer

price inflation in Malaysia rose to 3.3% y-o-y. Consumer price inflation in Viet Nam accelerated to 20.82% y-o-y in June from 19.78% in May.

On 23 June, Fitch Ratings upgraded the Philippines' long-term FCY issuer default rating to BB+ from BB. The long-term LCY issuer default rating and the country ceiling were also upgraded to BBB- from BB+. The outlook for all of the ratings is stable.

The Republic of Korea last week offered KRW475 billion of 10-year inflation-linked treasury bonds at a coupon rate of 2.75%. The Philippines' Bureau of the Treasury (BTR) plans to launch a debt swap on 28 June by offering to exchange short-dated PHP-denominated treasury notes for new 10-year and 20-year bonds.

Indonesia's House of Representatives has approved the government's proposal to use state properties valued at IDR30.2 trillion as underlying assets for issuing government sukuk (Islamic bonds).

Bank Negara Malaysia (BNM) announced last week that it will start to issue new Islamic monetary instruments called BNM Monetary Notes-Istithmar (investment). A total of MYR500 million of these new BMM notes was auctioned on 20 June, with issuance on the following day. Also in Malaysia, state-owned power producer Sarawak Energy sold MYR3.0 billion worth of multi-tranche sukuk, Powertron II issued MYR690 million worth of multi-tranche sukuk, water-company Pengurusan Aset Air raised MYR5.8 billion from privately placed Islamic medium-term notes, and Bank Muamalat Malaysia issued MYR400 million worth of 10-year non-callable, Tier 2 capital, subordinated Islamic notes.

The Republic of Korea issued KRW1.5 trillion of 28-day treasury bills at a yield of 3.35% last week, while CJ Cheiljedang, a Korean food manufacturing company, raised CNH1.1 billion of 3-year bonds at a coupon rate of 2.25%, making it the first CNH-denominated bond issuance by a Korean company in the

Hong Kong, China RMB bond market. China Merchant Holdings priced a CNH3.0 billion dual tranche bond last week. Genting Bhd. issued CNH1.28 billion worth of 3-year bonds, the first CNH-denominated bond issued by a Malaysian company in the Hong Kong, China RMB bond market. CapitaCommercial Trust of Singapore issued USD645 million of 5-year notes last week. In Thailand, Thanachart Bank issued THB10.0 billion of 8-year callable subordinated bonds, and the state-owned Provincial Electricity Authority issued THB1.1 billion of 15-year bonds at a 4.2% coupon.

Government bond yields fell last week for most tenors in Hong Kong, China; Indonesia; Malaysia; and the Philippines, while yields rose for all tenors in Thailand and Viet Nam, and for most tenors in the Republic of Korea. Yield movements were mixed in the People's Republic of China, and Singapore. Yield spreads between 2- and 10- year maturities widened in Hong Kong, China; Malaysia; the Philippines; and Singapore, while spreads narrowed in most other emerging East Asian markets.

C Asia Bond Monitor March 2011 read more

10-Year Selected LCY Government Security Yields Close of 24 June 2011 basis point change from

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

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 2.86 -4.80 -8.09 -42.99EU 2.83 -3.20 -12.50 -12.90JPHIndia 8.25 -2.20 -0.70 33.20Indonesia 7.50 0.40 -16.90 -10.90Malaysia 3.93 -0.40 -0.30 -11.10Korea, Rep. of 4.26 2.00 2.00 -26.00Philippines 6.32 -17.32 5.19 42.95Singapore 2.28 0.00 0.00 -43.00Thailand 3.80 0.00 2.90 6.90Viet Nam 12.70 6.70 1.70 95.00

apan 1.11 -0.50 -1.00 -1.80RC 3.94 -1.00 -5.00 3.00ong Kong, China 2.21 -6.80 1.40 -65.00

-8.09

-12.50

-0.70

-16.90

-0.30

2.00

5.19

0.00

2.90

1.70

-1.00

-5.00

1.40

………………………………………………………………………………………..……………………………..……...…

asianbondsonline.adb.org………………………………………………………………………..………………………………………………….......

DEBT HIGHLIGHTSASIANBONDSONLINE

Summary Text of News Articles

Consumer Price Inflation Accelerates in Hong Kong, China; Malaysia; and Viet Nam; Holds Steady in Singapore

........................................................................................................................................ Consumer price inflation in Hong Kong, China accelerated to 5.2% year-on-year (y-o-y) in May from 4.6% in April. According to the government, the bulk of the increase in consumer prices was due to higher food prices and a rise in private residential rents. Based on individual components, the largest price increases came from alcoholic drinks and tobacco, which rose 19.8% due to a one-time duty increase; food, which rose 7.0%; and utilities, which rose 7.9%. The government also said that inflation will likely continue to accelerate in the coming months due to domestic pressures and external factors such as global food prices and liquidity.

In Malaysia, consumer price inflation rose to 3.3% y-o-y in May from 3.2% in the previous month. On a month-on-month basis, consumer price increased by 0.3%. Index for food and non-alcoholic beverages was up 4.5% y-o-y while index for transport increased by 6.0% y-o-y in May. In January to May, consumer price index increased by 3.0%.

Consumer price inflation in Singapore remained steady at 4.5% y-o-y in May. Housing costs increased 8.1% on account of higher accommodation costs and electricity tariffs. Transport costs rose 7.5% as a result of higher prices of automobiles and petrol, while food prices were up 2.8%.

Consumer price inflation in Viet Nam accelerated to 20.82% y-o-y in June from 19.78% in May, driven by higher costs of food and transportation. Price of food and foodstuff surged 30.15% y-o-y, while transportation cost rose by 20.26% y-o-y in June. On a month-on-month basis, consumer prices increased by 1.09%.

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

For trends in Malaysia's inflation rate, refer to this link: http://asianbondsonline.adb.org/malaysia/data/marketwatch.php?code=policy_rate_and_inflation_trends

For statistics on Singapore's inflation rate, refer to this link: http://asianbondsonline.adb.org/singapore/data/macroeconomic_credit.php

For trends in Viet Nam's inflation rate, refer to this link: http://asianbondsonline.adb.org/vietnam/data/marketwatch.php?code=policy_rate_and_inflation_trends

Fitch Upgrades Philippines' Long-Term FCY Issuer Rating to BB+ ........................................................................................................................................ On 23 June, Fitch Ratings upgraded the Philippines' long-term foreign currency (FCY) issuer default rating to BB+ from BB. The long-term local currency (LCY) issuer default rating and the country ceiling were also upgraded to BBB- from BB+. The outlook for all of the ratings is stable. The short-term FCY rating has been affirmed at B. The ratings agency took note of the government's progress on fiscal consolidation, sustained macroeconomic stability combined with favourable prospects, and improving external finances. The FCY upgrade raises the Philippines' rating to the same level as Indonesia.

Republic of Korea Offers KRW475 Billion of 10-Year Inflation-Linked Treasury Bonds; Philippines' Bureau of Treasury to Launch Debt Swap

........................................................................................................................................ The Republic of Korea last week offered KRW475.0 billion of 10-year inflation-linked treasury bonds at a coupon rate of 2.75%.

In the Philippines, the Bureau of the Treasury (BTR) plans to launch a debt swap on 28 June in which the BTR will exchange short-dated PHP-denominated treasury notes for new 10-year and 20-year bonds. The BTR is waiting for approval from the Office of the President and a favorable opinion from the Bangko Sentral ng Pilipinas (BSP) to proceed with the exercise. The government aims to take advantage of strong investor interest-following Moody's upgrading the country's credit rating in June to Ba2 from Ba3, or two notches below investment grade-to lengthen its debt maturity profile and pursue fiscal consolidation. The government has tapped the state-owned Development Bank of the Philippines and Land Bank of the Philippines as lead arrangers, as well as four private banks as joint deal managers:

2

………………………………………………………………………………………………………………………..……….

………………………………………………………………………………………………………………………..….......asianbondsonline.adb.org DEBT HIGHLIGHTSASIANBONDSONLINE

Summary Text of News Articles

Republic of Korea Offers KRW475 Billion of 10-Year Inflation-Linked Treasury Bonds; Philippines' Bureau of Treasury to Launch Debt Swap (cont…)

........................................................................................................................................ First Metro Investment Corp., BPI Capital Corp., SB Capital Investment Corp., and Citibank. The government aims to complete the swap by the first week of July with settlement to follow the week after.

Indonesia's Parliament Approves IDR30.2 trillion of Underlying Assets for Sukuk; Bank Negara Malaysia to Issue New Islamic Monetary Instrument

........................................................................................................................................ Last week, Indonesia's House of Representatives approved the government's proposal to use state properties valued at IDR30.2 trillion as underlying assets for issuing government sukuk (Islamic bonds). The state properties that will be used to back the sukuk consist of buildings and land owned by ministries and other government institutions. Two scheduled auctions of IDR-denominated sukuk (31 May and 14 June) were postponed as the government first waited for approval of the underlying assets.

Bank Negara Malaysia (BNM) announced last week that it will begin issuing a new Islamic monetary instrument called BNM Monetary Notes-Istithmar. The notes will be based on the istithmar (investment) concept, which refers to a portfolio structure combining the principles of ijarah (sale and lease-back of assets) and murabahah (commodity mark-up sale transaction). A total of MYR500 million of the new instruments was auctioned on 20 June and issued on 21 June.

Malaysia's Sarawak Energy and Ranhill Powertron II Sell Multi-Tranche Islamic Bonds; Pengurusan Aset Air Raises MYR5.8 Billion from Private Placement of Islamic Medium-Term Notes;

Bank Muamalat Malaysia Issues MYR400 Million of 10-Year Non-Callable, Tier 2 Capital, Subordinated Islamic Notes ........................................................................................................................................ In Malaysia, state-owned power producer Sarawak Energy sold MYR3.0 billion worth of multi-tranche Islamic bonds last week. The largest tranche is the 10-year sukuk worth MYR1.0 billion, which carries a coupon of 5.15%. The remaining tranches comprise MYR500 million worth of 5-year notes priced at 4.40%, MYR700 million worth of 7-year notes at 4.70%, and MYR800 million worth of 15-year notes at 5.65%. The issuance is part of Sarawak Energy's MYR15.0 billion Sukuk Musyarakah Programme, which is rated AA1 by RAM Ratings. Proceeds of the issuance will be used to refinance the company's existing debts as well as for capital expenditures.

Ranhill Powertron II has issued MYR690 million worth of multi-tranche Islamic bonds. The first tranche is composed of issues with tenors between 2 and 11 years amounting to MYR340 million, while the second tranche is composed of issues with tenors between 12 and 18 years amounting to MYR350 million. The first tranche is a standalone and is rated AA by Malaysian Rating Corporation. The second tranche is rated AAA and is backed by Malaysia's bond guarantee agency, Danajamin Nasional. Proceeds of the issuance will be used to refinance syndicated loan facilities, finance the construction of the 190MW combined-cycle power project in Kota Kinabalu Industrial Park, and to meet working capital needs.

Pengurusan Aset Air, through Pengurusan Air SPV, has raised MYR5.8 billion from privately placed Islamic medium-term notes, proceeds of which will be used to acquire Selangor's water-related bonds. The sukuk, rated AAA by RAM Ratings, were issued in six tranches with maturities of 3-8 years.

Meanwhile, Bank Muamalat Malaysia issued MYR400 million in 10-year non-callable, Tier 2 capital, subordinated Islamic notes, which carry a profit rate of 5.15%. The musyarakah-based bond was rated A3 by RAM Ratings.

Republic of Korea Sells KRW1.5 Trillion of 28-Day Treasury Bills, Registers 13.9% Drop in LCY Corporate Bond Issuance for May;

Corporate Bond Issues from the PRC, Republic of Korea, Malaysia, Singapore, and Thailand ........................................................................................................................................ The Republic of Korea issued KRW1.5 trillion of 28-day treasury bills at a yield of 3.35% last week, the second issuance of 28-day treasury bills this month. Meanwhile, CJ Cheiljedang, a Korean food manufacturing company, announced last week that it has raised CNH1.1 billion of 3-year bonds at a coupon rate of 2.25%, making it the first CNH-denominated

3

………………………………………………………………………………………………………………………..……….

………………………………………………………………………………………………………………………..….......asianbondsonline.adb.org DEBT HIGHLIGHTSASIANBONDSONLINE

4

Summary Text of News Articles

Republic of Korea Sells KRW1.5 Trillion of 28-Day Treasury Bills, Registers 13.9% Drop in LCY Corporate Bond Issuance for May;

Corporate Bond Issues from the PRC, Republic of Korea, Malaysia, Singapore, and Thailand (cont…) ........................................................................................................................................ bond issuance by a Korean company in the Hong Kong, China RMB bond market. Proceeds from the company's bond sale in Hong Kong, China will be used for plant construction in Shenyang in the People's Republic of China (PRC).

LCY corporate bond issuance in the Republic of Korea fell 13.9% month-on-month (m-o-m) to KRW11.3 trillion in May, according to Financial Supervisory Service data. The decline was due to a monthly drop in the issuance of financial and non-financial firms, and asset-backed securities (ABS) companies. New LCY bond issues by financial firms amounted to KRW2.1 trillion in May, which was 14.3% lower than the previous month, while issuance by non-financial companies declined 8.5% m-o-m in May to KRW6.0 trillion. ABS issues were also down 58.4% m-o-m at KRW717 billion. In contrast, bank debentures climbed 3.6% m-o-m to KRW2.5 trillion.

Last week, China Merchant Holdings priced CNH3.0 billion worth of dual tranche bonds. The 3-year tranche worth CNH1.4 billion was priced to yield 2.0% and the 5-year tranche worth CNH1.6 billion was priced to yield 3.0%. The issue was undersubscribed, with the orderbook only reaching CNH3.6 billion against a target deal size of CNH4.0 billion.

In Malaysia, casino operator Genting Bhd. issued CNH1.28 billion worth of 3-year bonds last week, the first CNH-denominated bond issued by a Malaysian company in the Hong Kong, China RMB bond market. Proceeds from the bond, which pays a coupon of 3.95% per year, will be used for general corporate purposes and working capital.

Singapore's CapitaCommercial Trust issued USD645 million of 5-year notes last week. This was part of the trust's SGD10.0 billion multi-currency medium-term note program. The bonds are Class A secured floating rate notes and have been rated AAA by both Fitch Ratings and Moody's Investors Service.

Meanwhile, Thanachart Bank issued THB10.0 billion of 8-year subordinated bonds last week. The coupon rate is set at 5.5% for the first year, 6.0% for years 2-5, and 6.5% for years 6-8. The bonds, which are callable after 3 years, have been rated A by TRIS Rating. Also, Thailand's state-owned Provincial Electricity Authority issued THB1.1 billion of 15-year bonds at a 4.2% coupon.

Hong Kong, China's BOP Surplus Falls to HKD18.7 Billion in 1Q11; Philippine BOP Surplus Expands 78.0% in First 5 Months of 2011;

Japanese Exports Fall 10.3% in May ........................................................................................................................................ Hong Kong, China recorded a balance of payments (BOP) surplus of HKD18.7 billion for the first quarter of 2011, compared with HKD30.1 billion in 4Q10. In 1Q11, Hong Kong, China recorded a current account surplus of HKD40.7 billion and a net capital account outflow of HKD15.5 billion.

In the Philippines, the BSP announced that the BOP surplus rose 78.0% y-o-y to USD4.8 billion in January-May. The surplus was buoyed by robust earnings from the central bank's investments abroad and foreign exchange operations, as well as higher levels of foreign borrowing by the government, which offset a minimal slump in the growth of remittances from overseas Filipino workers. The BSP is forecasting annual BOP surpluses of USD6.7 billion in 2011 and USD4.4 billion in 2012. In 2010, the country posted a record BOP surplus of USD14.4 billion on the back of strong overseas remittances, high earnings in the business process outsourcing sector, sustained export growth, and surging capital flows.

In Japan, exports fell 10.3% y-o-y in May to JPY4.76 trillion-the third straight monthly decline-due to reduced production resulting from the March earthquake and subsequent nuclear crisis. Consequently, the country posted a trade deficit of JPY853.7 billion, the largest deficit ever recorded with the exception of a JPY967.9 billion deficit in January 2009 when exports plunged in the wake of the global financial crisis.

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

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-11*

US 0.01 0.00 -2.03 -11.46EU 1.08 -0.40 -8.10 68.30Japan 0.09 0.00 -1.00 -3.40PRC 3.56 0.00 15.00 38.00Hong Kong, China 0.07 0.00 -3.00 -21.00India 8.15 5.00 0.00 105.00Malaysia 2.91 0.00 -0.50 13.10Korea, Rep. of 3.28 1.00 5.00 77.00Philippines 3.00 0.00 -4.50 180.50Singapore 0.32 0.00 -1.00 -7.00Thailand 2.97 1.33 3.76 100.33

basis point change fromLatest ClosingMarkets

-2.03

-8.10

-1.00

15.00

-3.00

0.00

-0.50

5.00

-4.50

-1.00

3.76

Close of 24 June 2011

PreviousDay*

PreviousWeek* 1-Jan-11*

US 2.86 -4.80 -8.09 -42.99EU 2.83 -3.20 -12.50 -12.90Japan 1.11 -0.50 -1.00 -1.80PRC 3.94 -1.00 -5.00 3.00Hong Kong, China 2.21 -6.80 1.40 -65.00India 8.25 -2.20 -0.70 33.20Indonesia 7.50 0.40 -16.90 -10.90Malaysia 3.93 -0.40 -0.30 -11.10Korea, Rep. of 4.26 2.00 2.00 -26.00Philippines 6.32 -17.32 5.19 42.95Singapore 2.28 0.00 0.00 -43.00Thailand 3.80 0.00 2.90 6.90Viet Nam 12.70 6.70 1.70 95.00

basis point change fromLatest ClosingMarkets

-8.09

-12.50

-1.00

-5.00

1.40

-0.70

-16.90

-0.30

2.00

5.19

0.00

2.90

1.70

Close of 24 June2011

Source: Based on data from Bloomberg, LP.

………………………………………………………………………………………………………………………………… 5

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

Benchmark Yield Curves – Local Currency Government Bonds ip: Zoom-in on the table using the Acrobat zoom tool T

China, People’s Rep. 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

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-11

Indonesia Hong Kong, China

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

3.5

0 2 4 6 8 10 12 14 16

Time to maturity (years)

Yie

ld (%

)

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

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-11 24-Jun-11 17-Jun-11 10-Jun-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

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-11

2.62.83.03.23.43.63.84.04.24.44.64.8

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

Time to maturity (years)

Yie

ld (%

)

0.01.02.03.04.05.06.07.08.09.0

10.0

0 3 6 9 12 15 18 21 24 27

Time to maturity (years)Yi

eld

(%)

24-Jun-11 17-Jun-11 10-Jun-1124-Jun-11 17-Jun-11 10-Jun-11

0.3

0.8

1.3

1.8

2.3

2.8

3.3

3.8

0 3 6 9 12 15 18 21

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-11

2.02.32.52.83.03.33.53.84.04.34.5

0 2 4 6 8 10 12 14 16

Time to maturity (years)

Yiel

d (%

)

12.0

12.3

12.5

12.8

13.0

13.3

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

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-1124-Jun-11 17-Jun-11 10-Jun-11

0.00.51.01.52.02.53.03.54.04.55.0

0 4 8 12 16 20 24 28 32

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-11

0.0

0.5

1.01.5

2.0

2.5

3.03.5

4.0

4.5

0 5 10 15 20 25 30

Time to maturity (years)

Yiel

d (%

)

24-Jun-11 17-Jun-11 10-Jun-11

0.00.30.50.81.01.31.51.82.02.32.5

0 4 8 12 16 20 24 28 32 36 40

Time to maturity (years)

Yie

ld (%

)

24-Jun-11 17-Jun-11 10-Jun-11

………………………………………………………………………………………………………………………………… 6

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

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

24-Jun-11

17-Jun-11

10-Jun-11

LP. Source: Based on data from Bloomberg

………………………………………………………………………………………………………………………………… 7

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

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.

5.50

Inflation Rate

6.31

1-year Lending Rate

-4

-2

0

2

4

6

8

10

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

5.2Inflation Rate

0.5

HKMA Base Rate

-4

-2

0

2

4

6

8

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

9.06

Inflation Rate

7.50

Repurchase Cut-off Yield

-2

0

2

4

6

8

10

12

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

5.98

lation RateInf

6.75

0

2

4

6

8

10

12

14

16

18

20

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

BI Rate4.10

Inflation Rate

3.25

7-Day Repo Rate

0

4

6

8

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

2

3.30

Inflation Rate

3.00

Overnight Policy Rate

-4

-2

0

2

4

6

8

10

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

4.50

Inflation Rate

4.50

Overnight Reverse Repo

Rate

0

2

4

6

8

10

12

14

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

4.19Inflation Rate

3.001-Day Repo

Rate

-6

-4

-2

0

2

4

6

8

10

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

20.82Inflation Rate

9.00

Prime Lending Rate

0

3

6

9

12

15

18

21

24

27

30

Jan-05

Sep-05

Jun-06

Feb-07

Nov-07

Aug-08

Apr-09

Jan-10

Sep-10

Jun-11

………………………………………………………………………………………………………………………………… 8

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

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*

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

Mid

spre

ad in

bas

is po

ints

0

200

400

600

800

1,000

1,200

1,400

Dec-07 M ay-08 O ct-08 Apr-09 Sep -09 Feb-10 Jul-10 Jan-11 Ju n-11

Chin a, P eop le 's Rep . o f

Hon g Kon g, Ch ina

Ind one sia

Korea, Rep . o f

Jap an

Mal aysia

Ph ili p p in es

Thai lan d

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

50Jan-07 Aug -07 Apr-08 No v-08 Jul-09 M ar -1 0 O ct-1 0 Ju n-11

50

60

70

80

90

100

110

120

130

60

70

80

90

10 0

11 0

12 0

13 0Chin a, P eop le 's Rep. of

Ind on esia

Korea , Rep . o f

Mal aysia

Ph il ip p in es

Tha ilan d

Sin ga por e

Vie t Nam

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

………………………………………………………………………………………………………………………………… 9

…………………………………………………………………………………………………………………………………

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

10

Tip: Zoom-in on the table using the Acrobat zoom tool Selected Debt Security Issuances (20 - 24 June 2011)

PRC 21-Jun 1-year PBOC Bills 3.40 1.00 1.0022-Jun 30-year China Government Bond 4.50 30.00 30.00

HK 21-Jun 91-day Exchange Fund Bills 0.11 28.92 28.92182-day Exchange Fund Bills 0.13 9.00 9.00364-day Exchange Fund Bills 0.15 3.00 3.00

ID 21-Jun 3-month Treasury Bills 5.44 100.001-year Treasury Bills 5.68 1,550.0010-year Treasury Bonds 7.65 250.0030-year Treasury Bonds 9.33 1,100.00

JP 22-Jun 3-month Treasury Discount Bills 0.09 4,800.00 4,749.96KR 20-Jun 91-day Monetary Stabilization Bonds 3.35 1,000.00 1,000.00

182-day Monetary Stabilization Bonds 3.50 500.00 500.0010-year Treasury Bonds 4.26 1,900.00 1,900.00

MY 20-Jun 1-year BNM Islamic Notes - Istithmar 3.12 0.50 0.50119-day BNM Notes 2.82 0.50 0.50261-day BNM Notes 2.84 0.50 0.50

22-Jun 119-day BNM Islamic Notes 2.85 0.50 0.5091-day BNM Notes 2.82 2.50 2.50210-day BNM Notes 2.85 0.20 0.20

PH 21-Jun 10-year Fixed Rate Treasury Notes 6.44 6.50 9.00 9.00SG 20-Jun 91-day Treasury Bills 0.22 3.90 3.90TH 21-Jun 28-day BOT Bills 2.78 20.00 20.00

91-day BOT Bills 2.95 20.00 19.79182-day BOT Bills 3.20 18.00 16.77

Sources:  Local market sources and Bloomberg, LP.

7,000.00

Coupon (in %)

Amount Offered LCY Billions

Amount Issued LCY BillionsMarkets Auction Date Type of Security

Average Yield (%)

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

11

…………………………………………………………………………………………………………………………………

Tip: Zoom-in on the table using the Acrobat zoom tool Selected Asia Data Releases (28 June – 4 July 2011)

Country/Variable Release Date

Hi storic al Data

Recent Trends

Source: AsianBondsOnline, Bloomberg LP, and Reuters.

05/10: 3.5%06/10: 3.3%04/11: 4.0%05/11: 4.2%

Thailand's consumer price inflation accelerated to a 32-month high of 4.2% y-o-y in May, driven by higher food prices.

Republic of KoreaConsumer Price Indexy-o-y%JUN

07/01 05/10: 2.7%06/10: 2.6%04/11: 4.2%05/11: 4.1%

The Republic of Korea’s consumer price inf lation stood at 4.1% y-o-y in May, dow n 0.1 percentage point from the previous month.

Republic of KoreaMerchandise Exportsy-o-y%JUN

07/01 05/10: 39.8%06/10: 30.5%04/11: 25.1%05/11: 23.5%

The export grow th rate of the Republic of Korea declined to 23.5% y-o-y in May from 25.1% in April.

Consumer price inflation in Indonesia eased for a fourth straight month to 6.0% y-o-y in May.

IndonesiaTrade BalanceUSD billionMAY

07/01 04/10: 0.8005/10: 2.0503/11: 1.8804/11: 1.63

Indonesia recorded a trade surplus of USD1.63 billion in April, dow n slightly from USD1.88 billion in March.

JapanNational Consumer Price Index y-o-y%MAY

07/01 04/10: −1.2%05/10: −0.9%03/11: 0.0%04/11: 0.3%

Consumer price inflation in Japan rose to 0.3% y-o-y in April after having remained unchanged at zero since December 2010.

04/10: 9.0%05/10: 9.0%03/11: 8.7%04/11: 11.0%

Singapore’s M2 money supply grew 11.0% y-o-y in April, compared w ith 8.7% grow th in March.

China, People’s Republic ofPMI ManufacturingIndexJUN

07/01 05/10: 53.906/10: 52.104/11: 52.905/11: 52.0

The People’s Republic of China’s (PRC) purchasing managers’ index (PMI) for manufacturing fell to 52.0 in May from 52.9 in April.

MalaysiaM3 Money Supplyy-o-y%MAY

06/30 04/10: 8.1%05/10: 9.3%03/11: 8.2%04/11: 10.1%

Malaysia’s M3 money supply grow th accelerated to 10.1% y-o-y in April from 8.2% in March.

ThailandTotal Trade BalanceUSD millionMAY

06/30 04/10: −20105/10: 2,29103/11: 1,89204/11: −477

Thailand posted a trade def icit of USD477 million in April compared w ith a trade surplus of USD1.89 billion in March.

PhilippinesTrade BalanceUSD millionAPR

06/28 03/10: −37404/10: −95702/11: −89603/11: −1170

The trade deficit of the Philippines grew to USD1.17 billion in March from USD896 million in February.

Hong Kong, China M2 Money Supplyy-o-y%MAY

06/30 04/10: 3.0%05/10: 4.6%03/11: 7.4%04/11: 6.0%

Grow th in Hong Kong, China’s M2 money supply slow ed to 6.0% y-o-y in April f rom 7.4% in March.

06/28 04/10: –35.205/10: –25.103/11: −40.104/11: −42.4

Hong Kong, China’s trade deficit w idened to HKD42.4 billion in April from HKD40.1 billion in March.

Republic of KoreaCurrent AccountUSD millionMAY

06/28 04/10: 529.005/10: 3,859.003/11: 1,329.504/11: 1,876.8

The current account surplus of the Republic of Korea climbed to USD1.88 billion in April from USD1.33 billion in March.

ThailandConsumer Price Indexy-o-y%JUN

07/01

IndonesiaConsumer Price Indexy-o-y%JUN

07/01

SingaporeM2 Money Supplyy-o-y%MAY

06/30

05/10: 4.2%06/10: 5.1%04/11: 6.2%05/11: 6.0%

Hong Kong, ChinaExportsy-o-y%MAY

06/28 04/10: 21.7%05/10: 24.4%03/11: 21.5%04/11: 4.1%

Export grow th in Hong Kong, China decelerated to 4.1% year-on-year (y-o-y) in April from 21.5% in March.

Hong Kong, ChinaTrade BalanceHKD BillionMAY

…………………………………………………………………………………………………………………………….......asianbondsonline.adb.org

DEBT HIGHLIGHTSASIANBONDSONLINE

Tip: Click on link to open a new browser (Acrobat Reader 8); for lower versions right-click to open a new browser)

News Articles: Sources for Further Reading

Consumer Price Inflation Accelerates in Hong Kong, China; Malaysia; and Viet Nam; Holds Steady in Singapore

• Consumer Price Indices for May 2011 Census and Statistics Department (21 June 2011)

• Consumer Price Index Malaysia May 2011 Department of Statistics Malaysia (2 June 2011)

• Singapore Consumer Price Index Department of Statistics Singapore (23 June 2011)

• Vietnam sees inflation at almost 21% in June Yahoo News (24 June 2011)

• Consumer price index, gold and USD price indexes, June 2011 General Statistics Office of Vietnam (24 June 2011)

Fitch Upgrades Philippines’ Long-Term FCY Issuer Rating to BB+

• Fitch: Phl one step away from investment grade Philippine Star (24 June 2011)

Republic of Korea Offers KRW475 Billion of 10-Year Inflation-Linked Treasury Bonds; Philippines’ Bureau of Treasury to Launch Debt Swap

• June 10-yr KTBi Issue Rate (June 20, 2011) Ministry of Strategy and Finance (21 June 2011)

• Government to launch debt swap by end-June

Philippine Star (22 June 2011) Indonesia’s Parliament Approves IDR30.2 trillion of Underlying Assets for Sukuk; Bank Negara Malaysia to Issue New Islamic Monetary Instrument

• House approves Rp 30.2t in underlying assets for sukuk The Jakarta Post (21 June 2011)

• Introduction of Bank Negara Monetary Notes-Istithmar Bank Negara Malaysia (20 June 2011)

Malaysia’s Sarawak Energy and Ranhill Powertron II Sell Multi-Tranche Islamic Bonds; Pengurusan Aset Air Raises MYR5.8 Billion from Private Placement of Islamic Medium-Term Notes; Bank Muamalat Malaysia Issues MYR400 Million of 10-Year Non-Callable, Tier 2 Capital, Subordinated Islamic Notes

• Sarawak Energy Prices Islamic Bonds Business Times (20 June 2011) • Lighting Up Sarawak IFR Asia (18 June 2011) • Ranhill Powertron Sells Islamic Paper of M$690m IFR Asia (21 June 2011) • Danajamin Part Guarantees Ranhill Powertron II’s RM710

Million Sukuk Programme Danajamin (17 June 2011) • PAAB Goes Private IFR Asia (18 June 2011)

• RM400mil Subordinate Sukuk The Star (21 June 2011) • Muamalat Subs IFR Asia (18 June 2011)

Republic of Korea Sells KRW1.5 Trillion of 28-Day Treasury Bills, Registers 13.9% Drop in LCY Corporate Bond Issuance for May; Corporate Bond Issues from the PRC, Republic of Korea, Malaysia, Singapore, and Thailand

• S.Korea Sells 28-day Fiscal Bonds at 3.35 pct Reuters (22 June 2011)

• CJ Cheiljedang Floats US$170 Mln worth of Dimsum Bonds

YONHAP News (23 June 2011)

• Analysis of Direct Corporate Financing for May 2011 Financial Supervisory Service (23 June 2011)

• China Merchant closes Rmb3 billion dim sum bond

FinanceAsia (24 June 2011)

• Genting Said to Sell 1.28 Billion Yuan of Three-Year 3.95% Bonds Bloomberg LP (24 June 2011)

• CCT Reports Strong Response for Bond Issue

Channel News Asia (22 June 2011)

Hong Kong, China’s BOP Surplus Falls to HKD18.7 Billion in 1Q11; Philippine BOP Surplus Expands 78.0% in First 5 Months of 2011 ; Japanese Exports Fall 10.3% in May

• Hong Kong's Balance of Payments and International Investment Position statistics for the first quarter of 2011 Census and Statistics Department (23 June 2011)

• BOP surplus rises 78% to $4.8 B in January-May

Philippine Star (21 June 2011)

• Trade deficit in May second-biggest ever Japan Times (21 June 2011)

…………………………………………………………………………………………………………………………………

Disclaimer: AsianBondsOnline Newsletter is available to users free of charge. The ADB provides no warranty or undertaking of any kind in respect to the information and materials found on, or linked to, AsianBondsOnline Newsletter. The ADB accepts no responsibility for the accuracy of the material posted or linked to 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 materials 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 Web Site, which also apply.

12