31 October 2011

apan's exports of goods increased 2.4% year-on-year (y-o-y) in September, following a 2.8% increase in August. The growth rate turned positive in August for the first time since the 11 March earthquake and remained in positive territory in September. Merchandise exports from Hong Kong, China fell 3.0% y-o-y in September, following 6.8% growth in August, largely due to declining shipments to the People's Republic of China (PRC) and the United States (US). The Republic of Korea's current account surplus rose to US$3.1 billion in September from US$290 million in August. Also last week, Viet Nam reported export growth in October of 4.5% month-on-month (m-o-m). Advance estimates showed the Republic of Korea's real GDP grew 0.7% quarter-onquarter (q-o-q) and 3.4% y-o-y in 3Q11. Consumer sentiment in the Republic of Korea also improved in October. In September, Singapore's manufacturing output increased 12.8% y-o-y, while retail sales in Japan declined 1.2% y-o-y. Singapore's consumer price inflation eased to 5.5% y-o-y in September from 5.7% in August amid price hikes in food, housing, and transport. Viet Nam reported its October estimate for consumer price inflation at 21.6% y-o-y. Last week, Tenaga Nasional issued MYR4.85 billion of Islamic bonds and RHB Bank sold MYR250 million of medium-term notes in Malaysia. ICBC Asia priced the first Basel III-compliant CNH subordinated bond worth CNH1.5 billion and Dalian Port priced CNH400 million of 3-year bonds in Hong Kong, China. Bank of East Asia priced a US$500 million 10.5-year bond, the Government of Indonesia raised IDR11 trillion from its retail bond sale, the Republic of Korea's KT Corporation sold a total of KRW420 billion worth of dual-tranche bonds, and KDB priced a US$1 billion 5.5-year bond. Finally, PLDT plans to sell PHP5 billion of fixed-rate notes. The Bank of Japan (BOJ) decided last week to expand the size of its asset purchase program by JPY5 trillion and kept the uncollateralized overnight call rate between zero and 0.1%. The BOJ revised downward its growth forecast for Japan in fiscal years 2011 and 2012 from an earlier forecast made in July. The BOJ and the Bank of Thailand (BOT) announced their collaboration in implementing a THB lending facility, with Japanese government securities serving as collateral, to

Key Developments in Asian Local Currency Markets

asianbondsonline.adb.org

Asia Bond Monitor September 2011

10-Year Selected LCY Government Security Yields
Markets
Close of 28 October 2011

basis point change from Latest Closing Previous Day* Previous Week* 1-Jan-11*
2.32 2.18 1.04 3.74 1.57 8.85 6.36 3.78 3.93 5.69 1.77 3.38 12.67 -7.97 -2.70 3.20 -2.00 12.70 8.90 -4.00 1.20 0.00 -3.51 1.00 9.00 0.00 9.75 9.75 7.30 3.40 3.40 1.00 1.00 17.30 3.10 3.10 -3.40 4.50 4.50 3.00 3.00 -6.69 8.00 8.00 -1.20 11.70 11.70
7.30

US EU Japan PR C H ong Kong, C hina In dia Indones ia Malays ia Korea, R ep. of Philippines Singapore Thailand Viet N am

-3.40

-6.69

-1.20

-97.68 -78.40 -8.40 -17.00 17.30 -129.00 93.20 -124.80 -25.50 -59.00 -19.52 -94.00 -34.60 91.70

Selected Government Security Yields Benchmark Yield Curves - Local Currency Government Bonds 2-versus-10 Yield Spread Chart Policy Rate versus Inflation Rate Charts Credit Default Swap Spreads & Exchange Rate Indexes Selected Debt Security Issuances Selected Asia Data Releases

aid companies in Thailand affected by recent flooding. Also last week, Indonesia passed a bill to create the Financial Services Supervisory Authority (OJK), while Viet Nam released a decree on regulations governing corporate bond issuance. The Philippines posted a fiscal deficit of PHP18.5 billion in September after registering a surplus of PHP9.2 billion in the previous month. The fiscal deficit for January-September amounted to PHP53.0 billion. Government bond yields fell last week for all tenors in the Philippines and for most tenors in Indonesia and Thailand. Yields rose for all tenors in Republic of Korea and Singapore and for most tenors in the PRC; Hong Kong, China; Malaysia; and Viet Nam. Yield spreads between 2- and 10-year tenors narrowed in Republic of Korea and Viet Nam while spreads widened in most other emerging East Asian markets.

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Summary Text of News Articles Exports Grow 2.4% y-o-y in Japan and Fall 3.0% y-o-y in Hong Kong, China in September; Republic of Korea's Current Account Surplus Soars in September; Viet Nam Reports Export Growth of 4.5% m-o-m in October

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Japan's exports of goods increased 2.4% year-on-year (y-o-y) to reach JPY5.98 trillion in September, following a 2.8% increase in August. Export growth rates turned positive in August and remained in positive territory in September for the first gains since the 11 March earthquake. Overseas shipments to the People's Republic of China (PRC) grew 2.7% y-oy to JPY1.11 trillion for the month of September. Meanwhile, imports of goods expanded 12.1% from the previous year to JPY5.68 trillion. The country's trade surplus stood at JPY300.4 billion in September. Hong Kong, China's merchandise exports fell 3.0% y-o-y in September, following 6.8% growth in August. The drop was mainly triggered by an annual decline in exported goods to the PRC and the United States (US), which fell 7.3% and 8.9% y-o-y, respectively. By commodity, the y-o-y fall in exports was most evident in electrical machinery, appliances, and parts, as well as in apparel and clothing accessories. Meanwhile, imports climbed 2.3% y-o-y in September after increasing 14.1% y-o-y in August. The Republic of Korea's current account surplus soared to US$3.1 billion September from US290 million in August on the back of strong export growth. Viet Nam's exports in October were estimated to have reached US$8.3 billion, up 4.5% month-on-month (m-o-m), while imports were estimated to have reached US$9.1 billion, down nearly 3.7% from the previous month. The trade deficit stood at US$800 million for October and US$8.4 billion for the first 10 months of the year. For historical data on Japan's export and import growth rates, refer to this link: http://asianbondsonline.adb.org/japan/data/macroeconomic_credit.php For historical data on the Republic of Korea's current account balance, refer to this link: http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php

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Republic of Korea's Real GDP Expands 0.7% q-o-q in 3Q11, Consumer Sentiment Improves in October; Singapore's Manufacturing Output Grows 12.8% y-o-y in September; Japan's Retail Sales Fall 1.2% y-o-y in September

Advance estimates of the Republic of Korea's real gross domestic product (GDP) for 3Q11 showed an expansion of 0.7% quarter-on-quarter (q-o-q), slightly down from the previous quarter's GDP growth of 0.9%. Private consumption grew by only 0.6% q-o-q, compared with 0.9% in the previous quarter, while growth in gross fixed capital formation eased to 1.3% q-o-q in 3Q11 from 2.3% in 2Q11. On the other hand, government consumption strengthened 1.3% from the previous quarter and total exports of goods and services increased 2.0% q-o-q. On the supply side, the construction sector expanded 4.1% q-o-q in 3Q11, compared with 2.6% in 2Q11, while the manufacturing sector's growth rate eased slightly to 1.3% q-o-q from 1.4% in the previous quarter. Both the agriculture/forestry/fishing and electricity/gas/water supply sectors contracted in 3Q11, posting negative growth rates of -6.1% and -0.7%, respectively. On a y-o-y basis, the Republic of Korea's real GDP growth rate for 3Q11 remained unchanged from the previous quarter at 3.4%. Meanwhile, the Republic of Korea's composite consumer sentiment index stood at 100 in October, up 1 point from the previous month. The modest rise was bolstered by improvements in consumer sentiment for current living standards and current domestic economic conditions. Singapore's manufacturing output rose 12.8% y-o-y in September, mainly due to the surge in biomedical manufacturing, which expanded 88.4% y-o-y in September, including a 92.3% expansion of the pharmaceuticals segment. However, excluding biomedical manufacturing, output dropped 12.5% y-o-y in September. On a m-o-m basis, manufacturing output declined 0.7% in September. Excluding biomedical manufacturing, the m-o-m drop in output in September reached -2.3% in September. The electronics sector dropped 26.5% y-o-y in September, while the precision engineering sector and the general manufacturing sector fell 6.4% and 6.3% y-o-y, respectively. On the other hand, the chemicals sector and the transport engineering sector rose 7.4% and 4.2% y-o-y, respectively.

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Summary Text of News Articles Republic of Korea's Real GDP Expands 0.7% q-o-q in 3Q11, Consumer Sentiment Improves in October; Singapore's Manufacturing Output Grows 12.8% y-o-y in September; Japan's Retail Sales Fall 1.2% y-o-y in September (cont)

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Japan's retail sales fell 1.2% y-o-y in September as consumers opted to save amid a weakening labor market and falling wages. Sales in August dropped 2.6% from the previous year. Large retailers' sales declined a seasonally adjusted 3.6% y-o-y in September. For historical data on the Republic of Korea's real GDP growth rate, refer to this link: http://asianbondsonline.adb.org/korea/data/macroeconomic_credit.php

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Singapore's Consumer Price Inflation Eases to 5.5% in September; Viet Nam Estimates Consumer Price Inflation at 21.6% in October

Singapore's consumer price inflation eased to 5.5% y-o-y in September from 5.7% in August amid annual increases in transport, housing, and food prices. Transport costs rose 11.4% y-o-y in September, compared with 12.5% in August; housing costs climbed 9.6% y-o-y in September, after rising 9.9% in August; while food price inflation was slightly higher at 3.1% y-o-y in September from 3.0% in August. On a m-o-m basis, consumer price inflation fell marginally to 0.2% in September, primarily due to lower transport costs and clothing and footwear costs, which declined 1.2% and 1.3% m-om, respectively. Meanwhile, housing and food prices inched up 0.1% and 0.2% m-o-m, respectively. Viet Nam reported last week its October estimate of consumer price inflation, which stood at 21.6% y-o-y, compared with 22.4% in September. Moreover, Viet Nam estimated a 0.4% month-on-month (m-o-m) increase in consumer prices for October, the lowest monthly increase since April. Eight out of eleven product groups in the country's consumer price index (CPI) registered m-o-m increases in their respective price indices, with the largest monthly increase evident in education. In contrast, the remaining three product groups in the CPI-housing and building materials, transport, and telecommunications- posted monthly declines. For historical data on Singapore's consumer price inflation, refer to this link: http://asianbondsonline.adb.org/singapore/data/macroeconomic_credit.php For historical data on Viet Nam's consumer price inflation, refer to this link: http://asianbondsonline.adb.org/vietnam/data/macroeconomic_credit.php

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Tenaga Nasional Sells MYR4.85 Billion of Islamic Bonds, RHB Bank Issues Medium-Term Notes in Malaysia; Dalian Port Prices CNH Bonds, ICBC Asia Prices First Basel III-Compliant CNH Subordinated Bond Issuance; Bank of East Asia Prices US$500 Million 10.5-Year Subordinated Bond; Indonesia Sells IDR11 Trillion of Retail Bonds; KT Corporation Raises KRW420 Billion from Dual-Tranche Bond Sale; KDB Prices US$ 1 Billion 5.5-Year Bond; PLDT Plans PHP5 Billion Fixed-Rate Note Issuance in the Philippines

In Malaysia, power producer Tenaga Nasional, through special purpose vehicle Manjung Island Energy, sold MYR4.85 billion worth of Islamic bonds. The multi-tranche issuance was priced between 3.8% and 4.9%. Proceeds from the issuance will be used to partially fund the construction of a new coal-fired power plant in the state of Perak. Meanwhile, RHB Bank sold MYR250 million worth of 10-year medium-term notes last week. The notes carry an annual return of 4.25% and will mature on 29 October 2021. Dalian Port, a port operator, priced CNH400 million worth of 3-year bonds last week at a yield of 5.8%. The issue size is lower than the originally targeted CNH1 billion and a planned 5-year tranche was also scrapped. Industrial and Commercial Bank of China Asia (ICBC Asia), a subsidiary of Industrial and Commercial Bank of China, priced the first Basel III-compliant CNH subordinated bonds worth CNH1.5 billion last week. The bonds have a maturity of 10 years, a coupon rate of 6.0%, and are callable after 5 years.

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Summary Text of News Articles Tenaga Nasional Sells MYR4.85 Billion of Islamic Bonds, RHB Bank Issues Medium-Term Notes in Malaysia; Dalian Port Prices CNH Bonds, ICBC Asia Prices First Basel III-Compliant CNH Subordinated Bond Issuance; Bank of East Asia Prices US$500 Million 10.5-Year Subordinated Bond; Indonesia Sells IDR11 Trillion of Retail Bonds; KT Corporation Raises KRW420 Billion from Dual-Tranche Bond Sale; KDB Prices US$ 1 Billion 5.5-Year Bond; PLDT Plans PHP5 Billion Fixed-Rate Note Issuance in the Philippines (cont)

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Bank of East Asia priced a US$500 million 10-year subordinated bond at a coupon rate of 6.375% last week. Investors based in Asia were allocated 83% of the bonds, while European and US investors bought 11% and 6%, respectively. In Indonesia, the government raised IDR11 trillion from the sale of its eighth series of retail bonds coded ORI008. The initial target set by the government was IDR10 trillion but the government increased the size, with final bids reaching IDR12.3 trillion. The retail bonds carried a coupon rate of 7.3% and a maturity of 3 years. A total of 15,732 investors from 32 provinces purchased the bonds. Among the buyers, 24.9% were private employees, 23.0% were entrepreneurs, and 20.4% were housewives. In the Republic of Korea, KT Corporation raised a total of KRW420 billion from a dual-tranche bond sale last week. The issue included KRW320 billion worth of 5-year bonds at a coupon rate of 4.04% and KRW100 billion of 10-year bonds at a 4.23% coupon. Korea Development Bank priced a US$1.0 billion 5.5-year bond at a coupon rate of 3.875% last week. Meanwhile, Philippine Long Distance Telephone Co. (PLDT) plans to issue PHP5 billion of fixed-rate notes for capital expenditure and debt refinancing. PLDT has mandated Hong Kong Shanghai Banking Corp and First Metro Investment Corp. to arrange the issue. The timing and pricing has yet to be finalized. Recently, the National Telecommunications Commission issued a conditional approval to PLDT's planned 51.55% acquisition of Digital Telecommunications Phil. Inc. (Digitel). The deal would give PLDT 70% control over the domestic mobile market.

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BOJ Expands Asset Purchase Program, Keeps Policy Rate between Zero and 0.1%, Revises Growth Forecasts Downward for Fiscal Years 2011 and 2012

In Japan, the Policy Board of the Bank of Japan (BOJ) decided last week to expand the size of its asset purchase program-from JPY50 trillion to JPY55 trillion-and kept the uncollateralized overnight call rate between zero and 0.1%. The increase in the program's size will support purchases of Japanese Government Bonds (JGBs). The move comes on top of the BOJ's regular purchases of JGBs totalling about JPY21.6 trillion per year. The BOJ intends to increase its purchases by the end of 2012 to support sustainable growth and price stability. The BOJ revised downward its growth forecasts for Japan for fiscal years 2011 and 2012 from earlier forecast made in July. The revised growth forecast for fiscal year 2011 is 0.2%-0.4% and for fiscal year 2012 it is 2.0%-2.4%.

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BOJ and BOT Collaborate to Provide Liquidity and Assist Flood-Affected Companies in Thailand; Indonesia Passes Bill to Create Financial Services Supervisory Authority; Viet Nam Releases Regulations on Corporate Bond Issuance

The BOJ and the Bank of Thailand (BOT) announced last week their collaboration in implementing a THB lending facility, with Japanese government securities serving as collateral, to ensure financial stability and expand the range of liquidity provisioning measures in Thailand. Furthermore, it aims to aid companies in Thailand that are affected by the recent flooding. Indonesia's House of Representatives passed a bill last week that will pave the way for the creation of a new financial superbody to supervise the country's financial sector by early 2013. The Financial Services Supervisory Authority (OJK) will assume Bank Indonesia's current supervisory role on commercial banks. OJK will also oversee capital markets and non-banking institutions being monitored by the Capital Market and Financial Institution Supervisory board (Bapepam LK).

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Summary Text of News Articles BOJ and BOT Collaborate to Provide Liquidity and Assist Flood-Affected Companies in Thailand; Indonesia Passes Bill to Create Financial Services Supervisory Authority; Viet Nam Releases Regulations on Corporate Bond Issuance (cont)

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Viet Nam released a decree on the issuance of corporate bonds in domestic and international markets by joint stock and limited liability companies. The decree specified regulations pertaining to the principles of bond issuance as well as the face value, tenors, and types of bonds.

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Philippine Fiscal Deficit in January-September Stands at PHP53 Billion

The Philippine government incurred a PHP18.5 billion fiscal deficit in September following a surplus of PHP9.2 billion in the previous month. September's deficit brought the year-to-date (YTD) fiscal deficit to PHP53 billion, well below the YTD programmed ceiling of PHP234 billion. Recently, the Philippine government unveiled a fiscal stimulus package of PHP72 billion to boost the country's growth amid global economic uncertainty. The country's GDP growth eased to 3.4% y-o-y in 2Q11, pushing the government to revise downward its 2011 growth forecast to 4.4%-5.4% from 5.0%6.0%.

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Selected Government Security Yields

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3-Month Selected LCY Government Security Yields

Latest Closing 0.00 0.46 0.10 3.08 0.10 8.63 2.98 3.34 1.12 0.27 3.41 basis point change from Previous Previous 1-Jan-11* Day* Week* -1.53 -1.02 -1.53 -11.97 -24.90 -24.90 -10.50 6.00 0.00 0.00 0.00 -2.40 1.00 4.00 4.00 -10.00 0.00 0.00 0.00 -18.00 1.00 -2.00 1.00 153.00 0.10 0.40 0.40 19.90 2.00 0.00 2.00 83.00 -28.00 -43.50 -43.50 -8.00 1.00 0.00 1.00 -12.00 -2.07 0.47 -2.07 144.33

Markets US EU Japan PRC Hong Kong, China India Malaysia Korea, Rep. of Philippines Singapore Thailand

Close of 28 October 2011

10-Year Selected LCY Government Bond Yields

Latest Closing 2.32 2.18 1.04 3.74 1.57 8.85 6.36 3.78 3.93 5.69 1.77 3.38 12.67 basis point change from Previous Previous 1-Jan-11* Day* Week* -7.97 9.759.75 -97.68 7.30 -2.70 7.30 -78.40 3.40 3.20 3.40 -8.40 1.00 -2.00 1.00 -17.00 17.30 -129.00 12.70 17.30 3.10 8.90 3.10 93.20 -3.40 -4.00 -3.40 -124.80 4.50 1.20 4.50 -25.50 3.00 0.00 3.00 -59.00 -3.51 -6.69 -6.69 -19.52 8.00 1.00 8.00 -94.00 -1.20 9.00 -1.20 -34.60 0.00 11.70 11.70 91.70

Markets US EU Japan PRC Hong Kong, China India Indones ia Malays ia Korea, Rep. of Philippines Singapore Thailand Viet Nam

Close of 28 October 2011

Source: Based on data from Bloomberg, LP.

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Benchmark Yield Curves Local Currency Government Bonds

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China, Peoples Rep. of

4.00 2.0

Hong Kong, China

8.0

3.75
Yield (%)

1.5
Yield (%)
Yield (%)

7.3

3.50

1.0

6.5

3.25

0.5

5.8

3.00 0 1 2 3 4 5 6 7 8 9 10 11 12

0.0 0 2 4 6 8 10 12 14 16

5.0 0 3 6 9 12 15 18 21 24 27 30 33

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Korea, Republic of
4.25 4.00 3.75 3.50 3.25 3.00 0 2 4 6 8 10 12 14 16 18 20 22 4.2 4.0 3.8
Yield (%)
Yield (%)

Malaysia
8.0 7.0 6.0
Yield (%)

Philippines

3.6 3.4 3.2 3.0 2.8 0 2 4 6 8 10 12 14 16 18 20 22

5.0 4.0 3.0 2.0 1.0 0.0 0 3 6 9 12 15 18 21 24 27

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Singapore
2.5 2.0 1.5 1.0 0.5 0.0 0 3 6 9 12 15 18 21
4.0

Thailand
13.0

Viet Nam

3.8
Yield (%) Yield (%)

12.8

Yield (%)

3.5

12.5

3.3

12.3

3.0 0 2 4 6 8 10 12 14 16

12.0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

US
3.5 3.0 2.5
Yield (%)
3.5 3.0 2.5

EU
2.5 2.3 2.0 1.8
Yield (%)

Japan

Yield (%)

2.0 1.5 1.0 0.5 0.0 0 4 8 12 16 20 24 28 32

2.0 1.5 1.0 0.5 0.0 0 5 10 15 20 25 30

1.5 1.3 1.0 0.8 0.5 0.3 0.0 0 4 8 12 16 20 24 28 32 36 40

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Time to maturity (years)

28-Oct-11 21-Oct-11 14-Oct-11

Source: Based on data from Bloomberg.

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2-versus-10 Yield Spread Chart

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

China, People's Rep. of

28-Oct-11

Hong Kong, China Indonesia Korea, Rep. of Malaysia Philippines Singapore Thailand Viet Nam U.S. E.U. Japan 0 50 100 150 200 basis points 250

21-Oct-11 14-Oct-11

300

350

Source: Based on data from Bloomberg LP.

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Policy Rate versus Inflation Rate Charts

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China, Peoples Rep. of

10 8 6 4 2 2 0 0 Inflation Rate -2 -4 Jan-06 -2 -4 Jan-06 1-year Lending Rate 6.56 6.10 6 4 HKMA Base Rate 8

Hong Kong, China

12 5.8 Inflation Rate 10 8 6 4 0.5 2 0 -2 Jan-06 Inflation Rate Repurchase Cut-off Yield

9.72 8.5

Dec-06

Dec-07

Nov-08

Nov-09

Oct-1 0

Oct-1 1

Dec-06

Dec-07

Nov-08

Nov-09

Oct-1 0

Oct-1 1

Dec-06

Dec-07

Nov-08

Nov-09

Oct-1 0

Oct-1 1

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) cutoff yield as its policy rate. Source: Bloomberg LP.

Indonesia
20 18 16 14 12 10 8 6 4 2 0 Jan-06 Dec-06 Dec-07 Nov-08 Nov-09 Oct-1 0 Oct-1 1 0 Jan-06 Dec-06 Inflation Rate 6.5 4.61 2 4 BI Rate 6 8

Korea, Republic of
10
c

Malaysia

7-Day Repo Rate

8 6 4.30 3.25 4 2 0

Overnight Policy Rate

3.40 3.00

Inflation Rate

-2 -4 Jan-06

Inflation Rate

Dec-07

Nov-08

Nov-09

Oct-1 0

Oct-1 1

Dec-06

Dec-07

Nov-08

Nov-09

Oct-1 0

Oct-1 1

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.

Philippines
12 10 8 6 4.80 4 2 0 Jan-06 4.50 0 -2 Overnight Reverse Repo Rate 10 8 Inflation Rate 6

Thailand
30 Inflation Rate 27 24 4.03 4 2 1-Day Repo Rate 3.50 15 12 9 6 -4 -6 Jan-06 3 Dec-06 Dec-07 Nov-08 Nov-09 Oct-1 0 Oct-1 1 0 Jan-06 Dec-06 Dec-07 21 18 Prime Lending Rate

Viet Nam

Inflation Rate 21.6

9.00

Dec-06

Dec-07

Nov-08

Nov-09

Oct-1 0

Oct-1 1

Nov-08

Nov-09

Oct-1 0

Oct-1 1

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.

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Credit Default Swap Spreads & Exchange Rate Indexes

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Credit Default Swap Spreads - Senior 5-year*

1,400
China , P e ople 's Re p. of

Hong Kong, China

1,200
Indone s ia

Kore a , Re p. of

1,000

Mid spread in basis points

J a pa n

M a la ys ia

800
P hilippine s

600

Tha ila nd

400

200

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

0 Dec-07

Dec-08

No v-09

O ct-10

O ct-11

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

130 130
China , P e ople 's Re p. of

Indone s ia

120

120
Ma la ys ia

P hilippine s

110

110
Tha ila nd

100

100

S inga pore

Kore a , Re p. of

90

90
V ie t Na m

80

80

70

70

60

60

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

50 Jan - 07

50 A u g -07 M ar-08 O ct- 08 M ay-09 D ec-09 Ju l-10 F eb -11 O ct -11

10

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Selected Debt Security Issuances (24 28 October 2011)

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Mark ets
PRC HK ID JP KR

A u c tio n D ate
25-Oct 25-Oct 26-Oct 26-Oct 24-Oct

T y p e o f S ec u rity
1-year PBOC Bills 91-day Exchange Fund Bills 3-year Retail Bonds 3-month Treasury Discount Bills 2-year Japan Government Bonds 91-day Monetary Stabilization Bonds 1-year Monetary Stabilization Bonds 20-year Korea Government Bonds

A v erag e C o u p o n A m o u n t O ffered A m o u n t Is s u ed (in % ) Y ield (% ) L C Y B illio n s L C Y B illio n s

3.58 0.11 7.30 0.10 0.15 3.42 3.55 4.15 2.95 2.92 2.95 7.13 0.22 3.44 3.37 3.31 3.31 7.63 0.20 19.00 25.81 10,000.00 5,100.00 2,600.00 1,200.00 800.00 1,000.00 1.00 1.50 1.00 9.00 4.00 17.00 17.00 15.00 45.00 19.00 25.81 11,000.00 5,059.89 2,598.98 1,090.00 740.00 1,000.00 1.00 1.50 1.00 9.00 4.00 14.94 17.00 15.00 45.00

MY

25-Oct

63-day BNM Islamic Notes 77-day BNM Notes 119-day BNM Islamic Notes

PH SG TH

25-Oct 24-Oct 25-Oct

25-year Fixed Rate Treasury Notes 91-day Treasury Bills 28-day BOT Bills 91-day BOT Bills 182-day BOT Bills 2-year BOT Bonds

Sources: Local market sources and Bloomberg, LP.

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DEBT HIGHLIGHTS

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Selected Asia Data Releases (1 - 7 November 2011)

Tip: Zoom-in on the table using the Acrobat zoom tool

C o u n tr y /V a r ia b le
Pe ople s Re p ublic of Ch ina PM I Index OCT Hong Kong , China Re tail Sale s y -o-y , % SEP Indo ne s ia CPI y -o-y , % OCT Indo ne s ia Expor ts y -o-y , % SEP Japan V e h icle Sale s y -o-y , % OCT Re pub lic of Kor e a CPI y -o-y , % OCT Re pub lic of Kor e a Expor ts y -o-y , % OCT Sing ap or e PM I Index OCT T hailand CPI y -o-y , % OCT M alays ia Expor ts y -o-y , % SEP Philipp ine s CPI y -o-y , % OCT

R e le a s e D a te
11/01

H is to r ic a l D a ta
09/10: 53.8 10/10: 54.7 08/11: 50.9 09/11: 51.2 08/10: 17.1% 09/10: 17.2% 07/11: 29.1% 08/11: 29.0% 09/10: 5.8% 10/10: 5.7% 08/11: 4.8% 09/11: 4.6% 08/10: 30.2% 09/10: 23.8% 07/11: 39.5% 08/11: 37.1% 09/10: 4.1% 10/10: 26.7% 08/11: 25.5% 09/11: 1.7% 09/10: 3.6% 10/10: 4.1% 08/11: 5.3% 09/11: 4.3% 09/10: 16.2% 10/10: 27.6% 08/11: 25.5% 09/11: 18.8% 09/10: 49.5 10/10: 50.7 08/11: 49.4 09/11: 48.3 09/10: 3.0% 10/10: 2.8% 08/11: 4.3% 09/11: 4.0% 08/10: 9.4% 09/10: 5.6% 07/11: 7.1% 08/11: 10.9% 09/10: 3.9% 10/10: 3.3% 08/11: 4.7% 09/11: 4.8%

R ec en t T ren d s
The purc has ing managers index (PMI) f or the manuf ac turing sec tor in the Peoples Republic of China (PRC) improv ed to 51.2 in September f rom 50.9 in the previous month. Grow th in Hong Kong, Chinas retail s ales s tood at 29.0% year-on-y ear (y -o-y) in A ugust, similar to the 29.1% grow th recorded in the previous month.

11/01

11/01

Indones ias c ons umer pric e inf lation eas ed to 4.6% y -o-y in September f rom 4.8% in A ugus t.

11/01

Indones ias ex port grow th f ell to 37.1% y -o-y in A ugus t f rom 39.5% in July .

11/01

Japans v ehic le s ales grow th rec ov ered in September to 1.7% y-o-y f rom a dec line of 25.5% in A ugust.

11/01

Cons umer pric e inf lation in the Republic of Korea w eakened to 4.3% y -o-y in September f rom 5.3% in A ugust.

11/01

The Republic of Koreas ex port grow th rate dec reas ed to 18.8% y -o-y in September f rom 25.5% in the prev ious month.

11/01

The PMI f or Singapores manuf ac turing s ec tor s lipped to 48.3 points in September f rom 49.4 points in the prev ious month.

11/01

Cons umer pric e inf lation in Thailand slow ed to 4.0% y -o-y in September f rom 4.3% in A ugus t.

11/04

Malay sias ex port grow th ac c elerated to 10.9% y -o-y in A ugus t f rom 7.1% in July .

11/04

Cons umer pric e inf lation in the Philippine ros e marginally to 4.8% y -o-y in September f rom 4.7% in A ugust.

S ource: A sianB ondsOnline, B loom berg LP , and Reuters.

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DEBT HIGHLIGHTS

.......

News Articles: Sources for Further Reading

Tip: Click on link to open a new browser (Acrobat Reader 8); for lower versions right-click to open a new browser) Exports Grow 2.4% y-o-y in Japan and Fall 3.0% y-o-y in Hong Kong, China in September; Republic of Koreas Current Account Surplus Soars in September; Viet Nam Reports Export Growth of 4.5% m-o-m in October Trade Statistics of Japan September 2011 Ministry of Finance (24 October 2011) External Merchandise Trade Statistics for September 2011 Census and Statistics Department (25 October 2011) Balance of Payments during September 2011 (preliminary) The Bank of Korea (28 October 2011) Viet Nam's October Trade Deficit Estimated at $800m: GSO Intellasia (26 October 2011) Tenaga Sukuk Oversubscribed 4.7 Times Business Times (27 October 2011) BONDS: Dalian Port Raises Only Rmb400m via Debut Dim Sum IFR Asia (26 October 2011) BEA and ICBC Asia Price Subordinated Bonds Finance Asia (31 October 2011) Govt Retail Bond Sales Top Rp 11t The Jakarta Post (25 October 2011) KDB Prints $1 Billion Bond Without New Issue Premium Finance Asia (28 October 2011) Philippines' PLDT Says Plans $116 Mln Notes Issue Reuters (26 October 2011)

Republic of Koreas Real GDP Expands 0.7% q-o-q in 3Q11, Consumer Sentiment Improves in October; Singapores Manufacturing Output Grows 12.8% y-o-y in September; Japans Retail Sales Fall 1.2% y-o-y in September Real Gross Domestic Product: 3rd Quarter of 2011 (Advance estimate) The Bank of Korea (27 October 2011) Consumer Survey Index, October 2011 The Bank of Korea (27 October 2011) Monthly Manufacturing Performance September 2011 Department of Statistics Singapore (25 October 2011) Preliminary Report on the Current Survey of Commerce Ministry of Economy, Trade and Industry (27 October 2011)

BOJ Expands Asset Purchase Program, Keeps Policy Rate between Zero and 0.1%, Revises Growth Forecasts Downward for Fiscal Years 2011 and 2012 Enhancement of Monetary Easing Bank of Japan (27 October 2011) Outlook for Economic Activity and Prices Bank of Japan (27 October 2011)

BOJ and BOT Collaborate to Provide Liquidity and Assist Flood-Affected Companies in Thailand; Indonesia Passes Bill to Create Financial Services Supervisory Authority; Viet Nam Releases Regulations on Corporate Bond Issuance Collaboration Between the Bank of Thailand and the Bank of Japan to Implement an Arrangement for Liquidity Provision in Thai Baht to Financial Institutions in Thailand Utilizing Japanese Government Securities as Collateral Bank of Thailand (25 October 2011) Indonesia's Finance Industry Gets a New Watchdog Jakarta Globe (28 October 2011) Regulations on Issuance of Corporate Bonds Ministry of Finance (24 October 2011)

Singapores Consumer Price Inflation Eases to 5.5% in September; Viet Nam Estimates Consumer Price Inflation at 21.6% in October Singapore Consumer Price Index, September 2011 Department of Statistics Singapore (24 October 2011) Viet Nams CPI Rises by 0.36% in October The State Bank of Viet Nam (25 October 2011)

Tenaga Nasional Sells MYR4.85 Billion of Islamic Bonds, RHB Bank Issues Medium-Term Notes in Malaysia; Dalian Port Prices CNH Bonds, ICBC Asia Prices First Basel III-Compliant CNH Subordinated Bond Issuance; Bank of East Asia Prices US$500 Million 10.5-Year Subordinated Bond; Indonesia Sells IDR11 Trillion of Retail Bonds; KT Corporation Raises KRW420 Billion from Dual-Tranche Bond Sale; KDB Prices US$ 1 Billion 5.5-Year Bond; PLDT Plans PHP5 Billion Fixed-Rate Note Issuance in the Philippines

Philippine Fiscal Deficit in JanuarySeptember Stands at PHP53 Billions January to September Fiscal Deficit at P 52.994 Billion Bureau of the Treasury (25 October 2011)

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