The National Development Reform Commission of the People's Republic of China (PRC) issued new rules governing issuance by domestic non-financial companies in the offshore renminbi bond market in Hong Kong, China last week. Policy rates were left unchanged by central banks in Indonesia, the Republic of Korea, and Malaysia. Meanwhile, the People's Bank of China decided to cut its reserve requirement ratio by another 50 basis points effective 18 May. GDP growth in Hong Kong, China weakened to 0.4% year-on-year (y-o-y) in 1Q12 and fell slightly in Indonesia to 6.3% y-o-y.

The People's Republic of China (PRC), Japan, and the Republic of Korea agreed to promote investment by their respective foreign reserve authorities in each other's government bonds at the Annual Meeting of the Asian Development Bank last week, while members of the ASEAN+3 group of nations agreed to increase the size of the Chiang Mai Initiative Multilateralisation (CMIM) to US$240 billion from US$120 billion. Consumer price inflation in April climbed to a 7-month high of 4.5% year-on-year (y-o-y) in Indonesia, declined to 2.5% y-o-y in the Republic of Korea, and rose to 3.0% y-o-y in April in the Philippines. In Thailand, inflation decelerated to 2.5% y-o-y in March and the Bank of Thailand decided kept its policy rate steady at 3.00% on 2 May.

Consumer price inflation accelerated in Hong Kong, China; Japan; and Singapore in March, while it eased in Viet Nam in April. Real gross domestic product of the Republic of Korea grew 2.8% year-on-year (y-o-y) in 1Q12. The People’s Bank of China and the World Bank Group signed an agreement last week, allowing the International Bank for Reconstruction and Development and the International Development Association to invest in the PRC’s interbank bond market. Trade deficit widened in Hong Kong, China in March, while it narrowed in the Philippines in February. Standard and Poor’s affirmed Indonesia’s sovereign ratings last week. Philippine fiscal deficit expanded in 1Q12.

Emerging East Asia's local currency bond markets expanded 7.0% to $5.7 trillion in 2011, driven by double-digit growth in the region's corporate bond markets, according to the latest edition of the Asian Development Bank's (ADB) Asia Bond Monitor. Emerging East Asia's contractual savings institutions – that is, pension funds, insurance companies, and social securities institutions – have become increasingly important buyers of the region's corporate bonds. Cross-border portfolio debt holdings in Asia remain low, but a survey of 78 investors included in the report shows that bond market conditions, notably return, risks, liquidity and market infrastructure, drive investor decisions on cross-border investments. This suggests ongoing regional collective initiatives and national reforms to develop local and regional market is crucial.

Last week, HSBC issued the first offshore renminbi bond in London at a size of CNY2 billion with a tenor of 3 years and priced to yield 3.0%. The Indonesian government raised US$2.5 billion from the sale of 10- and 30-year bonds with coupon rates of 3.75% and 5.25%, respectively. China Development Bank (CDB) sold CNY6 billion of 7-year bonds and CNY6 billion worth of 10-year bonds at coupon rates of 4.32% and 4.44%, respectively. Consumer price inflation in Malaysia was at 2.1% y-o-y in March. Merchandise export in Japan surged 5.9% y-o-y to JPY6.2 trillion in March.

Policy rates were left unchanged last week by central banks in Indonesia, the Republic of Korea, and Japan while the State Bank of Viet Nam cut its discount rate, refinancing rate, and overnight rate. The People’s Bank of China (PBOC) announced last week that it would begin allowing the renminbi to trade in a wider band and the Monetary Authority of Singapore (MAS) announced last week that it will continue with its policy of modest and gradual currency appreciation. The People’s Republic of China (PRC) gross domestic product (GDP) in 1Q12 expanded 8.1% year-on-year (y-o-y) and Singapore\s GDP growth eased to 1.6% y-o-y in 1Q12.

The Asean+3 Bond Market Guide is a comprehensive report on bond market in the ASEAN+3 region. The Guide is a product of the collaborative efforts of ASEAN+3 Bond Market Forum (ABMF) members and is the first report endorsed by ASEAN+3.

The current account balance of the Republic of Korea reverted to a surplus in February following a deficit position in January. Consumer price inflation stood at 0.3% y-o-y in Japan in February, while it eased in the Republic of Korea to 2.6% y-o-y in March from 3.1% in February. The Republic of Korea's real GDP growth for full-year 2011 was 3.6%, while the purchasing managers' index (PMI) of the People's Republic of China (PRC) rose to 53.1 in March from 51.0 in February. Last week, Singapore issued a 30-year bond worth SGD2.1 billion. Thailand's budget deficit widened to THB131.2 billion in February.

Bank Negara Malaysia announced that Renminbi Settlement Services will be included in its Real-Time Electronic Transfer of Funds and Settlement System, effective 21 March. The Singapore Exchange introduced dual currency trading that enables trading of listed securities in two different currencies. Malaysia's consumer price inflation slowed to 2.2% year-on-year (y-o-y) in February, while consumer price inflation in Singapore eased to 4.6% y-o-y in February. The consumer price index in Viet Nam eased for the 7th straight month to 14.2% y-o-y in March.

Last week, Hong Kong Monetary Authority (HKMA), Bank Negara Malaysia (BNM), and Euroclear unveiled a pilot platform for cross-border investment and settlement of Asian debt securities and the Monetary Authority of Singapore (MAS) disclosed three new initiatives to improve efficiency and liquidity in Singapore's local currency corporate debt market. Meanwhile, the Bank of Japan (BOJ) left its policy rate unchanged and the State Bank of Viet Nam (SBV) decided to cut several key interest rates by 100 basis points.

Exchange Rate Indexes was added as a new indicator under the Regional Market Watch section of the AsianBondsOnline website.

Market at a Glance under the Regional section now includes a summary table of sovereign credit ratings for emerging East Asia. The table presents sovereign credit ratings provided by Fitch Ratings, Moody's Investors Service, Rating and Investment Information Inc (R&I), and Standard and Poor's (S&P) for each market in emerging East Asia.

Consumer price inflation moderated in the People's Republic of China (PRC) and in the Philippines in February. Policy interest rates were kept steady by central banks in Indonesia, the Republic of Korea, and Malaysia last week. FCY bond issues last week included OCBC Bank's 3-year bond worth US$1 billion, Berau Coal Energy's US$500 million 5-year bond, and Hyundai Capital Services' US$500 million 5.5-year bond. In Hong Kong, China, Emirates NBD sold CNH750 million of 3-year bonds and Shinhan Bank issued CNH625 million of 1-year bonds. The PRC is planning to develop a high-yield LCY bond market that will provide additional financing for SMEs.

A new Market Watch page was launched for the Regional Data section of the ABO website. The Market Watch page was previously available only under the individual market pages. This new market Watch page for the regional section presents a graph of the government bond yield curves, and a graph of recent trends in inflation rates and policy rates for each individual market.

Two new indicators have been added in the Data section of each market - monthly bonds outstanding and corporate securities maturity profile. The monthly bonds outstanding indicator shows the absolute amount of local currency bonds outstanding on a monthly basis, broken down by different types of bonds for each market. The corporate securities maturity profile indicator classifies corporate bonds by the remaining time to maturity, presented as a percentage of total corporate bonds outstanding in maturity buckets of 1-3, 3-5, 5-10, and >10 years.

Last week, Bangko Sentral ng Pilipinas (BSP) lowered its key policy rates for the second time this year, joining neighboring Indonesia and Thailand in reducing borrowing costs. Republic of Korea sold KRW410 billion of 182-day Treasury bills and Thailand raised THB5 billion from the sale of 50-year bonds. Annual consumer price inflation in Indonesia, the Republic of Korea, and Thailand eased in February. The manufacturing purchasing managers index (PMI) in the People's Republic of China (PRC) rose to 51 in February, the highest level since October 2011.

Consumer price inflation in Hong Kong, China quickened to 6.1% year-on-year (y-o-y) in January. Inflation in Malaysia slowed to 2.7% y-o-y in January. Singapore's January consumer price inflation stood at 4.8% y-o-y. Inflation in Viet Nam fell for the sixth straight month to 16.4% y-o-y in February. The People's Republic of China (PRC) signed a 3-year, CNY1 billion currency swap agreement with Turkey.The Philippines sold a total of PHP179.8 billion of 15- and 20-year Retail Treasury Bonds.

Malaysia's gross domestic product (GDP) grew 5.2% year-on-year (y-o-y) in 4Q11, down slightly from the 5.8% growth posted in 3Q11, supported by sustained domestic demand. Singapore's GDP growth rate fell to 3.6% y-o-y in 4Q11 compared with 6.0% growth posted in the prior quarter. Remittances to the Philippines from overseas Filipinos soared to a new record high of US$20.2 billion in 2011. The People's Bank of China reduced the reserve requirement ratio for banks by 50 basis points.

Bank Indonesia decided last week to lower its benchmark interest rate by 25 basis points to 5.75%, while the Bank of Korea decided to keep the 7-day repurchase rate at 3.25%. Consumer price inflation in January accelerated to 4.5% y-o-y in the People's Republic of China, but eased to 3.9% y-o-y in the Philippines. In 4Q11, Indonesia's GDP grew 4.5% y-o-y while Japan's GDP shrank at an annualized 2.3%. Last week, China Overseas Land and Investment priced US$500 million of 5-year bonds; Lanxess sold CNH500 million of 3-year bonds in Hong Kong, China; and Maybank priced a US$400 million 5-year senior note.

Consumer price inflation moderated in Indonesia, the Republic of Korea, and Thailand on a year-on-year (y-o-y) basis, while accelerating on a month-on-month level. Bank Negara Malaysia (BNM) decided to keep its overnight policy rate at 3.0% during its Monetary Policy Meeting on 31 January. Bangko Setnral ng Pilipinas (BSP) cuts its reserve requirement ratio for banks from 21.0% to 18.0%. BNM and the Bank of Thailand (BOT) signed a Memorandum of Understanding to enter into a cross-border collateral arrangement to improve liquidity facility measures for financial institutions operating in both countries.

Last week, the Bank of Thailand cut its 1-day repurchase rate by 25 bps to 3.0% while the Bank of Japan kept its target rate unchanged at between zero and 0.1%. Real GDP growth in the Republic of Korea slowed to 0.4% q-o-q in 4Q11 while it advanced to 3.7% y-o-y in 4Q11 in the Philippines. In December, inflation remained stable in Hong Kong, China and eased in Singapore, while it fell in Japan for the third consecutive month.

Moody's raised Indonesia's FCY and LCY bond ratings to Baa3 from Ba1, with a stable outlook for both. Moody's also raised its FCY deposit ratings for nine Indonesian banks to Baa3/Prime-3 with a stable outlook. Bangko Sentral ng Pilipinas slashed its policy rates by 25 basis points in its monetary policy meeting last week. The growth rate of the People's Republic of China's gross domestic product slowed to 8.9% year-on-year in 4Q11 from 9.1% in 3Q11.

Consumer price inflation eased slightly in the People's Republic of China (PRC) in December, while export and import growth waned in the same month. Bank Indonesia and the Bank of Korea decided to leave unchanged their policy rates at 6.0% and 3.25%, respectively. Last week, Indonesia sold US$1.75 billion of 30-year bonds at a coupon rate of 5.25%. The PRC has given approval to 10 PRC financial institutions to sell up to a total of CNH25 billion worth of bonds in Hong Kong, China. Thailand has given approval to seven foreign companies to sell local currency bonds in Thailand totaling THB66 billion between 1 January and end-September.

The Philippines opened 2012 with a 25-year, US$-denominated benchmark bond designed to fund the country's stimulus projects. The government raised US$1.5 billion last week from the offering. Korea Eximbank sold two-US$-denominated bonds totaling US$2.25 billion. In 1Q12, the Indonesian government plans to raise IDR53.2 trillion in rupiah-denominated bonds and the Philippines plans to issue PHP117 billion worth of treasury bills and bonds. Finally, Singapore's gross domestic product grew 3.6% year-on-year in 4Q11, based on advanced estimates released by the Ministry of Trade and Industry.

Last week, Fitch upgraded Indonesia's long-term FCY and LCY debt to BBB- with a stable outlook and Moody's remained a stable outlook for Indonesia's banking sector. Meanwhile, S&P affirmed its FCY and LCY long-term sovereign credit ratings for the Republic of Korea and raised its outlook on the Philippines' sovereign credit rating from stable to positive. By January 2012, Viet Nam will have 8 experimental market makers in the local bond market.

Consumer price inflation in the People's Republic of China's (PRC) fell to 4.2% year-on-year (y-o-y) in November from 5.5% in October, mainly due to a decline in food prices. On 8 December, the Bank of Korea's (BOK) Monetary Policy Committee decided to leave its base rate unchanged at 3.25%, and Bank Indonesia's (BI) Board of Governors also decided to keep its benchmark interest rate steady at a record-low level of 6.0% The PRC's industrial output growth slowed to 12.4% y-o-y in November from 11.6% in September.

The AsianBondsOnline 2011 Bond Market Liquidity Survey was conducted from early August through mid-October. The emergence of concerns about European sovereign debt during the survey period - as well as mixed signals on the pace of economic recovery in the US - contributed to a widening of the average bid-ask spread for both government and corporate sector benchmark bonds from the levels of our 2010 survey. Liquidity in the government bond markets was nevertheless robust, with quarterly turnover ratios rising in most markets.

Economic growth in emerging East Asia will continue to moderate to 7.2% in 2012 from 7.5% in 2011—as growing sovereign debt problems in Europe and an anemic US economy raise the spectre of a deep global economic downturn, says the Asian Development Bank's latest Asia Economic Monitor. In the event that both the eurozone and the US economies contract sharply, the impact on emerging East Asia would be serious yet manageable, the report says.

Consumer price inflation for the month of November eased in Indonesia to 4.15% y-o-y, accelerated in Republic of Korea to 4.2% y-o-y, and remained steady in Thailand at 4.19%. Last week, the People's Bank of China announced that it will lower the reserve requirement ratio of banks by 50 basis points (bps) effective 5 December, the Philippines held its policy rates steady, while the Bank of Thailand lowered its policy rate by 25 bps. Philippine real GDP growth eased to 3.2% y-o-y in 3Q11 from 3.4% in 2Q11, while the purchasing managers' index (PMI) for the People's Republic of China's (PRC) manufacturing sector fell to 49.0 in November from 50.4 in October.

Demand for local bonds is still strong in face of rising risks and global weakness. The local currency bond markets in emerging East Asia grew by 5.5% y-o-y at the end of September to reach USD5.5 trillion, driven by strong growth in corporate bonds. Yield curves in most LCY government bond markets flattened and shifted downwards as market and policy focus moved to support growth. In the recent AsianBondsOnline Bond Market Liquidity Survey for 2011 current concerns about global financial stability contributed to a modest widening of bid-ask spreads from the levels of last year's survey.

The People's Bank of China announced last week that it would maintain a prudent monetary stance and would continue to monitor economic and financial conditions, and will fine tune policies as needed. On 16 November, the Bank of Japan maintained its overnight call rate target at 0.0% to 0.1%. Malaysia's real gross domestic product growth increased to 5.8% year-on-year in 3Q11, driven by stronger domestic demand. Finally, the Indonesian government successfully raised US$1 billion from the sale of global sukuk while the Shanghai Municipal Government and Guangdong Provincial Government issued the first PRC local government bonds last week.

Bank Indonesia (BI) cut its benchmark interest rate by 50 basis points (bps) last week, bringing the BI rate to a record-low 6.0%. The Bank of Korea left its 7-day repurchase rate at 3.25% while Bank Negara Malaysia held its benchmark overnight policy rate steady at 3.0%. In the People's Republic of China (PRC), consumer price inflation eased to 5.5% year-on-year (y-o-y) in October from 6.1% in September due to a decline in food prices. Fitch Ratings affirmed the Republic of Korea's foreign currency (FCY) long-term issuer default rating at A+ and revised its outlook from stable to positive.

October consumer price inflation slowed in Indonesia to 4.4% y-o-y and in the Republic of Korea to 3.9% but accelerated to 5.2% in the Philippines and 4.2% in Thailand. The People's Republic of China's manufacturing purchasing managers' index fell to 50.4 in October, while the non-manufacturing PMI fell to 57.7 over the same period. Singapore's PMI was at 49.5 in October, slightly higher than the 49.4 registered in September.

Japan's exports of goods increased 2.4% y-o-y in September, while Hong Kong, China's merchandise exports fell 3.0% y-o-y in September. Advance estimates showed the Republic of Korea's real GDP grew 0.7% q-o-q and 3.4% y-o-y in 3Q11. Consumer price inflation for Singapore stood at 5.5% y-o-y in September while Viet Nam reported its October estimate for consumer price inflation at 21.6% y-o-y. Tenaga Nasional issued MYR4.85 billion worth of Islamic bonds, ICBC Asia priced the first Basel III-compliant CNH subordinated bond worth CNH1.5 billion, and KDB priced a US$1 billion 5.5-year bond last week.

The People's Republic of China's GDP grew 9.1% year-on-year (y-o-y) in 3Q11, the slowest quarterly GDP growth rate since 2009 due to weaker exports. Last week, Bank of Thailand and Bangko Sentral ng Pilipinas decided to keep their policy rates unchanged. CPI in Hong Kong, China and Malaysia accelerated in September to 5.8% y-o-y and 3.4% y-o-y.

Last week the Philippines accepted a total of US$1.3 billion in a buyback of EUR- and US$-denominated bonds and raised US$50 million through a reopening of its bonds maturing on 23 October 2034. The Philippine government unveiled a PHP72.1 billion fiscal stimulus package to boost the country's growth through the first half of 2012. Bank Indonesia cut its benchmark rate by 25 basis points to 6.5% on 11 October while The Bank of Korea maintained its 7-day repurchase rate at 3.25% on 13 October. Finally, Singapore's economy expanded 5.9% y-o-y in 3Q11, according to advance estimates released by the Ministry of Trade and Industry.

Consumer price inflation in Indonesia eased to 4.6% year-on-year (y-o-y) in September as food prices declined. In the Republic of Korea, inflation eased to 4.3% y-o-y in September from 5.3% in August. Consumer price inflation in Thailand also fell in September to 4.0% y-o-y from 4.3% in the previous month due to a slowdown in rising energy prices and transport costs. Meanwhile, inflation in the Philippines inched up to 4.8% y-o-y in September from 4.7% in August.

Export growth moderated in Hong Kong, China to 6.8% y-o-y in August and eased in Republic of Korea to 19.6% y-o-y in September. Viet Nam’s cumulative GDP growth rate for January-September was reported at 5.8% y-o-y. The People’s Republic of China’s (PRC) Purchasing Managers’ Index improved to 51.2 in September. Consumer price inflation stood at 0.2% y-o-y for Japan in August and 22.4% y-o-y for Viet Nam in September. LCY corporate bond issuance in the Republic of Korea rose 27.1% m-o-m in August

In August, consumer price inflation (CPI) slowed in Hong Kong, China to 5.7% y-o-y while it also slightly eased to 3.3% y-o-y in Malaysia. In Singapore, CPI accelerated to 5.7% y-o-y due to higher costs for transportation, housing and food. The foreign debt of the PRC climbed to USD642.5 billion as of end-June from USD586.0 billion as of end-March. Meanwhile, Japan posted a trade deficit in August of JPY775.3 billion, the highest trade deficit since 1979.

Hong Kong, China's industrial production growth rate fell to 2.0% year-on-year (y-o-y) in 2Q11 from 3.5% in 1Q11. In Japan, the Ministry of Economy, Trade, and Industry revised its July production index downward to -3.0% y-o-y from a preliminary figure of -2.8%. In the Philippines, merchandise exports shrank for a third consecutive month in July- by 1.7% y-o-y to USD4.4 billion-as the global slowdown curbed demand for electronic products. Singapore's non-oil domestic exports grew 5.1% y-o-y in August after posting a 2.8% decline in July.

Consumer price inflation eased in the People's Republic of China (PRC) to 6.2% y-o-y in August from 6.5% in July, and also in the Philippines to 4.7% y-o-y in August from 5.1% in July, as the increase in food prices slowed. However, it accelerated in Indonesia to 4.79% y-o-y in August from 4.61% in July. Policy interest rates were held steady last week in Indonesia, Japan, the Republic of Korea, Malaysia, and the Philippines. The trade surplus for the PRC dropped to USD17.8 billion in August from USD31.5 billion in July, as imports surged 30.2% y-o-y.

Gross domestic product (GDP) growth in the Philippines fell to 3.4% year-on-year (y-o-y) in 2Q11. Japan's industrial production rose 0.6% in July while industrial output grew 3.6% y-o-y in the Republic of Korea. Consumer price inflation accelerated in August for the Republic of Korea and Thailand on food price hikes. Finally, PBOC plans to expand its reserve requirement base and State Bank of Viet Nam increases foreign currency reserve requirement ratio effective 1 September.

The size of local currency bond markets in emerging East Asia continued to expand in the first half of this year, rising to USD5.5 trillion at the end of June, 2.4% higher in local currency terms than at the end of March, and 7.7% more than at the end of June 2010. The overall emerging East Asian market's growth was driven by corporate bonds, which grew by 4.4% quarter-on-quarter. The PRC's corporate bond market grew at a more rapid pace of 6.3% in the same period and is now the region's largest corporate bond market.

Malaysia's and Thailand's real GDP growth in 2Q11 moderated to 4.0% year-on-year (y-o-y) and 2.6% y-o-y, respectively. Consumer price inflation for Malaysia eased slightly to 3.4% y-o-y in July. The People's Republic of China (PRC) raised a total of CNH15 billion of bonds in the Hong Kong, China offshore market last week, with the average coupon rate that was lower by 225 basis points compared to onshore yields. In June, Singapore's growth in retail sales accelerated to 10.9% y-o-y, and overseas remittances to the Philippines rose 7.0% y-o-y to USD1.7 billion.

Consumer price inflation in the People's Republic of China rose to 6.5% year-on-year (y-o-y) in July from 6.4% in June. Hong Kong, China's GDP growth slowed in 2Q11 to 5.1% y-o-y from 7.5% y-o-y in 1Q11. Meanwhile, Singapore's GDP rose 0.9% y-o-y in 2Q11, down significantly from 9.3% growth in 1Q11. Japan's real GDP shrank at an annualized rate of 1.3% in 2Q11. At its meeting on 9 August, Bank Indonesia's Board of Governors decided to keep its reference rate steady at 6.75%. Also, the Bank of Korea decided on 11 August to hold the 7-day repurchase rate steady at 3.25%.

Resilience of Asian capital markets is put to the test by the renewed global financial turmoil. This year's issue of Asia Capital Markets Monitor (ACMM) assesses Asian markets' integration with the global market and capital flow volatility and offers policy recommendations.

Standard & Poor's downgraded its sovereign rating for the US government last week from AAA to AA+. Consumer price inflation eased in Indonesia and the Philippines in July, while creeping marginally higher in Thailand. Indonesia's economy expanded 6.5% y-o-y in 2Q11. The Philippines incurred a budget deficit of PHP17.2 billion in 1H11. National Agricultural Cooperative Foundation in the Republic of Korea priced USD500 million of 5.5-year bonds with a coupon of 3.50%. Please note that the Asia Capital Markets Monitor (ACMM) for 2011 will be launched on 9 August.

Consumer price inflation rose during July in the Republic of Korea and Viet Nam to 4.7% year-on-year (y-o-y) and 22.2%, respectively. In Singapore, consumer price inflation in June rose to 5.2% y-o-y compared to 4.5% in May. In the Philippines, Bangko Sentral ng Pilipinas (BSP) decided to leave its policy rates unchanged, although it raised its reserve requirements. Finally, Standard and Poor's (S&P) lowered its local currency long-term credit rating for Malaysia to A+ from A with a Stable Outlook, due mainly to a change in its rating methodology.

After last year's strong economic recovery, emerging East Asia will see growth moderate this year as authorities continue to battle inflation amid anemic recovery and deleveraging in advanced economies, says the July issue of the Asia Economic Monitor. ADB forecasts aggregate GDP to rise a still robust 7.9% in 2011 and 7.7% in 2012. The report says rising inflation could bring wage-price spirals that could upset the region's shift from crisis recovery to sustained economic growth. The July AEM also suggests that a pragmatic approach to a range of policies may help governments manage the inflationary impact of sustained and volatile changes in commodity prices.

Consumer price inflation accelerated to 3.5% year-on-year (y-o-y) in Malaysia while Hong Kong, China's composite consumer price index climbed 5.6% y-o-y in June. The Bank of Korea has restricted foreign exchange agencies' investments in foreign-currency-denominated bonds issued domestically for Korean won financing, effective 25 July. Last week, KHFC priced a USD500 million 5.5-year covered bond; First Gen Corporation in the Philippines launched PHP10 billion worth of perpetual preferred shares; Singapore's Housing Development Board sold a SGD600 million 10-year bond; and Sansiri raised THB1 billion from a 5-year bond sale in Thailand.

The People's Republic of China's gross domestic product expanded 9.5% year-on-year (y-o-y) in 2Q11. Meanwhile, Singapore's GDP growth slowed significantly to 0.5% y-o-y in 2Q11. The Bank of Thailand raised its 1-day repurchase rate by 25 basis points to 3.25% on 13 July. Bank Indonesia decided to keep its reference rate steady at 6.75% and the Bank of Korea's also decided to maintain its 7-day repurchase rate at 3.25%.

The People’s Republic of China (PRC) raised its policy rates by 25 basis points effective 7 July. Bank Negara Malaysia maintained its policy rate on 7 July but raised its statutory requirement by 1% effective 16 July. Viet Nam slashed repurchase rate by 1% on 4 July. In June, PRC’s consumer price inflation rose to 6.4% year-on-year(y-o-y) and Philippines’ inflation was at 4.6% y-o-y. The Republic of Korea’s producer price inflation was constant at 6.2% y-o-y in both May and June. PRC and Malaysia recorded trade surpluses of USD22.3 billion in June and MYR51.3 billion in January-May, respectively. Thailand sold THB40 billion of 10-year inflation-linked bonds at a coupon of 1.2%.

Consumer price inflation in June eased to 5.5% y-o-y in Indonesia, while it accelerated to 4.4% y-o-y in Republic of Korea. In Thailand, consumer price inflation stood at 4.1% y-o-y in June while in Japan, it was 0.3% y-o-y in May. Local government debt of the People’s Republic of China stood at CNY10.7 trillion at end-2010. Last week, Malaysia issued USD2.0 billion of 5- and 10-year sukuk (Islamic bonds), Industrial and Commercial Bank of China sold CNY38.0 billion worth of subordinated bonds, Indonesia Bank Permata issued IDR1.75 trillion of subordinated debt, and Korea Eximbank priced a JPY80 billion triple-tranche samurai bond.

Consumer price inflation in Hong Kong, China accelerated to 5.2% year-on-year (y-o-y) in May from 4.6% in April. Consumer price inflation in Singapore remained steady at 4.5% y-o-y in May, but rose slightly to 3.3% y-o-y in Malaysia in May. In Viet Nam consumer price inflation accelerated to 20.82% in June from 19.78% in May. On June 23, Fitch Ratings raised the Philippines' foreign debt rating to BB+ from BB, and also raised the Philippines' local currency debt rating to BBB-.

Consumer prices in the People's Republic of China rose in May at the fastest rate in almost 3 years, increasing 5.5% year-on-year. In response, the People's Bank of China announced a 50 basis point increase in the reserve requirement ratio of banks. The Bank of Japan kept its overnight call rate target at zero to 0.1%. In the Philippines, the Monetary Board of the Bangko Sentral ng Pilipinas decided to keep its policy rates steady but hiked the reserve requirement by 100 basis points. Moody's Investors Service upgraded its foreign and local currency long-term ratings for Philippine government bonds to Ba2 from Ba3, and assigned a stable outlook to both.

The Bank of Thailand raised its 1-day repurchase rate by another 25 basis points to 3.0% on 1 June on the back of increased inflationary pressures fueled by elevated oil and commodity prices. Thailand's consumer price inflation accelerated to a 32-month high of 4.2% y-o-y in May, driven by higher food prices. Indonesia's inflation eased to 6.0% y-o-y from 6.2% in April, while in the Republic of Korea inflation slowed to 4.1% in May from 4.2% in April. The Philippines' real GDP growth slowed to 4.9% y-o-y in 1Q11 from 7.1% growth in 4Q10.

Consumer price inflation accelerated in Hong Kong, China; Japan; and Viet Nam last week, while it eased in Singapore. Current account surplus narrowed in the PRC in 1Q11 while it widened in the Republic of Korea in April. Real GDP growth in 1Q11 stood at 3.0% y-o-y in Thailand and 4.9% y-o-y in the Philippines. In April, the Philippines posted the highest monthly fiscal surplus in the past 25 years, while the Republic of Korea's fiscal deficit fell in 1Q11.

Real GDP in Japan shrank by 3.7% y-o-y in 1Q11, while Malaysian GDP growth for 1Q11 grew by 4.6% y-o-y, compared to 4.8% in the previous quarter. Robust growth of domestic demand helped offset slower export growth in Malaysia in 1Q11. Singapore GDP grew 8.3% y-o-y in 1Q11. Indonesia's state-owned oil and gas company - Pertamina - priced a bond for USD1 billion last week, while China Resources Land, a PRC property developer, priced a bond for USD750 million. In Thailand, construction company Italian-Thai Development priced a 5-year bond for THB3.5 billion, and Korean Air priced KRW300 billion of 3-year senior notes.

Consumer price inflation in the People's Republic of China (PRC) rose 5.3% year-on-year (y-o-y) in April, down from 5.4% in March. PRC industrial output grew 13.4% y-o-y in April, while retail sales grew of 17.1% y-o-y. The People's Bank of China hiked the reserve requirement ratio for banks by 50 basis points, bringing the ratio to 21.0% for large institutions and 18.5% for small and medium-sized financial institutions. Meanwhile, Bank Indonesia and Bank of Korea both kept their policy rates steady at 6.75% and 3.00%, respectively. In Hong Kong, China, GDP grew by 7.2% y-o-y in the first quarter due to strong exports and domestic demand.

Consumer price inflation surged in the Philippines and Thailand in April, while slowing in Indonesia and the Republic of Korea. Consumer price inflation in Singapore was steady in March. Malaysia, the Philippines, and Thailand raised their respective policy rates by 25 basis points each, while Viet Nam raised its reverse repurchase rate by 100 basis points, on the back of increased inflationary pressures. Indonesia’s economy expanded 6.5% y-o-y in 1Q11, down slightly from 6.9% in 4Q10.

An additional 3 billion Asians could enjoy higher living standards, and the region could account for over half of global output by the middle of this century, says a new ADB commissioned report. This potentially promising future for the region sometimes referred to as the "Asian Century" though plausible, is by no means preordained. A draft overview of the report will be unveiled and discussed at the Governors' Seminar in ADB's 44th Annual Meeting, Ha Noi.

The People's Republic of China reported GDP growth of 9.7% year-on-year (y-o-y) in 1Q10 as well as a rise of its inflation rate to 5.4% y-o-y in March from 4.9% in February. On 17 April, the People's Bank of China raised its reserve requirement for banks by 50 basis points. Both Bank Indonesia and Bank of Korea left their policy rates unchanged last week, while the Monetary Authority of Singapore announced an upward re-centering of its exchange rate policy band. Finally, the Securities Commission of Malaysia launched its Capital Market Masterplan 2 as an effort to further develop its domestic capital market.

The People’s Bank of China raised its 1-year deposit rate and 1-year lending rate by 25 basis points each to 3.25% and 6.31%, respectively, while Bank of Japan decided to hold its benchmark interest rate unchanged in a range of zero to 0.1%. Producer prices in the Republic of Korea soared by 7.3% y-o-y in March while consumer price inflation in the Philippines was steady at 4.3% y-o-y in March and the Philippine government recorded a fiscal deficit of PHP 21.5 billion in February. Indonesia’s long-term foreign currency sovereign rating was raised by S&P to BB+ while PRC’s credit ratings were affirmed by Rating and Investment Information.

The Republic of Korea registered real gross domestic product (GDP) growth of 6.2% in 2010, driven by 14.5% growth in the export of goods and services. Meanwhile, Viet Nam’s economy is estimated to have expanded 5.4% year-on-year (y-o-y) in the first quarter of 2011, down from the 7.3% growth in the previous quarter. Consumer price inflation in Indonesia fell to 6.7% in March y-o-y from 6.8% in February. Meanwhile, consumer price inflation in March accelerated to 4.7% y-o-y in the Republic of Korea and to 3.1% y-o-y in Thailand.

Emerging East Asia's local currency bond markets expanded by 13.6% year-on-year (y-o-y) to USD5.2 trillion in 2010, driven by strong growth in corporate bonds that helped to offset a decline in issuance by central banks and some governments in the last quarter of 2010. Furthermore, this growth has come to be more broadly based. The region's local currency bond markets, excluding the People's Republic of China (PRC), expanded by 11.6% y-o-y in 2010. Meanwhile, total bonds outstanding in the PRC, the region's largest market, grew 15.1% y-o-y to reach USD3.1 trillion. Total corporate bonds outstanding grew by 20.3% to reach USD1.6 trillion in 2010.

Consumer price inflation slowed in Singapore while it quickened in Hong Kong, China; Malaysia; and Viet Nam on the back of escalating costs of food, transport and fuel. The Bangko Sentral ng Pilipinas (BSP) hiked its overnight borrowing, or reverse repurchase (RRP) facility to 4.25% and the overnight lending, or repurchase (RP) facility to 6.25%. The People's Bank of China (PBOC) announced its approval to eight additional banks to use offshore renminbi proceeds to purchase bonds on the onshore interbank bond market. The Philippine government issued USD1.5 billion of 15-year bonds while the Development Bank of the Philippines sold USD300 million of 10-year bonds.

Yields on Japanese bonds fell in the belly of the yield curve, Japanese stocks rose, and the Japanese yen depreciated at the end of last week, after the G7 governments announced on Friday that they will join with Japan in concerted intervention in the foreign exchange markets. The People's Bank of China announced a 50 basis point hike in the reserve requirement ratio last week, its third hike for the year. Orix Corporation became the first Japanese company to issue renminbi bonds in Hong Kong, China while Bank of East Asia became the first Hong Kong, China-based commercial bank to issue renminbi bonds in the People's Republic of China.

Policy interest rates were raised last week in the Republic of Korea, Thailand, and Viet Nam, while Malaysia kept steady its policy rate but increased its statutory reserve requirement. Consumer price inflation in the People’s Republic of China (PRC) remained unchanged in February at 4.9% y-o-y. Powerlong Real Estate issued CNY750 million of 3-year synthetic renminbi bonds in Hong Kong, China at 11.5% coupon, while Malaysian-based Hong Leong Bank priced a USD300 million 5-year senior bond. The impact of last week’s tragedy in Northern Japan on the region’s financial markets remains unclear.

Consumer price inflation in Indonesia eased to 6.8% year-on-year (y-o-y) in February, compared with 7.0% in January. Bank Indonesia (BI) decided on 4 March to keep its benchmark rate steady at 6.75%. Consumer price inflation also eased to 2.9% y-o-y in Thailand in February. Meanwhile, consumer price inflation accelerated to 4.5% and 4.3% y-o-y in the Republic of Korea and the Philippines, respectively, in February.

Consumer price inflation accelerated in Hong Kong, China; Malaysia; and Singapore for January while consumer prices were essentially unchanged from January 2010 in Japan. Consumer price inflation in Viet Nam also rose in February. Hong Kong, China's GDP growth slowed to 6.2% y-o-y in 4Q10 and rose 6.8% for the year as a whole in 2010. Thailand's GDP eased in 4Q10 to 3.8% y-o-y and expanded 7.8% y-o-y in 2010. Finally, Fitch Ratings upgraded Indonesia's dbt rating outlook to positive from stable on account of strong economic growth and a rapidly declining government debt burden.

Malaysia's GDP growth rate eases to 4.8% year-on-year (y-o-y) while Singapore surged 12.0% y-o-y in 4Q10. Japan's Policy Board kept the target rate for unsecured overnight call money between zero and 0.1%. The State Bank of Viet Nam raised its refinancing rate to 11.0% to curb accelerating inflation. The People's Bank of China (PBOC) increased the reserve requirement ratio of banks by 50 basis points. PRC's trade surplus fell to USD6.5 billion, its lowest level in 9 months. Remittances in the Philippines grew 8.1% in December to reach USD1.7 billion.

Policy interest rates were raised last week by 25 basis points in the People’s Republic of China (PRC) and were held steady in the Republic of Korea and the Philippines. Viet Nam adjusted its inter-bank average exchange rate by 7% and narrowed its trading band to +/-1% from +/-3%. Lippo Karawaci in Indonesia raised USD125 million from a re-opening of its 2015 senior notes, while Busan Bank in the Republic of Korea issued JPY20 billion dual-tranche samurai bonds. Foreign investor holdings of LCY bonds in the Republic of Korea fell for the second-consecutive month in January. Japanese GDP shrank in 4Q10 at an annualized rate of 1.1%, but rose 3.9% for 2010 as a whole.

Consumer price inflation accelerated in Indonesia, the Republic of Korea, the Philippines, and Thailand last month mainly due to higher food prices. Bank of Indonesia decided to raise its policy rate by 25 basis points to 6.75% on 4 February. The Philippine economy posted 7.3% growth in 2010, its largest expansion in 34 years, driven by rapid growth of exports, remittances, and election spending in the first half of 2010.

Singapore's consumer price inflation climbed to 4.6% year-on-year (y-o-y) in December, the highest level since 2008, as prices for transport, housing, and food increased. Viet Nam's consumer price inflation rose to 12.2% y-o-y in January while consumer prices in Japan fell 0.4% y-o-y in December. The Bank of Japan and the Bank Negara Malaysia kept their policy rates at 0.1% at 2.75%, respectively. S&P downgraded Japan's sovereign credit rating from AA to AA-. Finally, several USD-denominated bonds were issued last week in the People's Republic of China, Indonesia, the Republic of Korea and the Philippines.

GDP growth in the People's Republic of China accelerated to 9.8% year-on-year in 4Q10 compared with 9.6% in 3Q10. The PRC's growth rate for 2010 as a whole rose to 10.3%, the fastest rate in 3 years and well above the 9.2% growth rate in 2009. Consumer price inflation eased in the PRC, and accelerated in Hong Kong, China and Malaysia in December. Local currency corporate bond issuance in the Republic of Korea fell 25.3% month-on-month in December to KRW7.3 trillion. Finally, Moody's Investors Service upgraded Indonesia's foreign currency and local currency debt ratings to Ba1 last week, with a stable outlook.

The Republic of Korea and Thailand both raised their policy interest rates by 25 basis points each last week to 2.75% and 2.25%, respectively. Sinochem (Hong Kong) sold CNY3.5 billion of offshore renminbi bonds while Hong Kong Electric issued an additional USD250 million of its December 2020 bonds last week. Merchandise export growth of the People’s Republic of China (PRC) eased to 17.9% y-o-y in December, while it slowed to 11.2% y-o-y for the Philippines in November. Singapore plans to allow the trading of LCY government securities on the Singapore Exchange.

The Philippine government sold USD1.25 billion worth of PHP-denominated bonds last week, the second time it has issued a global peso bond since successfully raising USD1.0 billion in September. Moody's Investors Service raised the Philippines' sovereign credit outlook from stable to positive. The World Bank priced its very first CNY-denominated bond in Hong Kong, China. In the People's Republic of China's (PRC), the Bank of Communications announced that it had issued CNY500 million worth of certificates of deposit and China SCE Property Holdings conducted a roadshow last week for a synthetic renminbi bond issue in Hong Kong, China.

The People's Republic of China (PRC) last week announced it will modestly tighten monetary policy next year. The People's Bank of China (PBOC) raised the bank reserve requirement ratio by 50 basis points. Meanwhile, the Bank of Korea (BOK) retained its 7-day repurchase rate at 2.50% last week. In November, consumer price inflation for the PRC accelerated to 5.1% year-on-year (y-o-y), while it rose to rose to 3.0% y-o-y in the Philippines. Growth in Japan's M3 money supply decelerated to 2.0% in November, Korea's average growth rate of M2 money supply decelerated to 7.6% in October, and the Philippines' M3 growth slowed to 7.7% y-o-y in October.

Policy interest rates were raised in Thailand and remained unchanged in Indonesia and Viet Nam last week. Consumer price inflation accelerated in Indonesia while it slowed in the Republic of Korea (Korea). Thailand's consumer price inflation remained unchanged in November from the previous month. Korea's 3Q10 real gross domestic product growth was revised slightly downward to 4.4% year-on-year from 4.5% as growth in exports and domestic investment offset less robust consumption. Finally, Indonesia's sovereign credit ratings are being reviewed by Moody's Investors Service for a possible upgrade.

Economic growth in Malaysia and the Philippines eased in 3Q10 on the back of lower government spending. The People’s Republic of China (PRC) reported that it intends to use all available monetary policy tools in order to guide money and credit growth back to normal levels, and that it had also put on hold its mini-QFII program. Annual consumer price inflation in October stood at 2.6% for Hong Kong, China; 2.0% for Malaysia; and 3.5% for Singapore, while it was 11.1% for Viet Nam in November. Caterpillar Inc. sold CNY1 billion of 2-year debt in Hong Kong, China last week.

A rapid rise of corporate bond issuance in emerging East Asia has driven the region’s local currency bond markets to grow to just over $5 trillion at the end of September. The corporate bond market of emerging East Asia grew by 23.8% year-on-year and 5.7% on a quarter-on-quarter basis to reach $1.6 trillion. Local currency government bonds in emerging East Asia totaled $3.550 trillion at the end of September, 14.6% higher year-on-year and 1.9% higher quarter-on-quarter. This slower growth came with many countries now paring their fiscal stimulus packages and with some central banks opting to slow sterilizing bond sales.

The Republic of Korea (Korea) announced last week that it supports legislation to re-impose a 14% withholding tax on interest income and a 20% levy on capital gains on Korean treasury and central bank bonds held by foreign investors. The People's Bank of China again hiked the reserve requirements of banks. Korea raised its 7-day repurchase rate by 25 basis points to 2.50%. In 3Q10, Singapore’s gross domestic product (GDP) grew 10.6% year-on-year (y-o-y), Japan grew at an annual rate of 3.9%, and Thailand posted 6.7% y-o-y growth.

The People's Republic of China hiked its reserve requirement ratio by 50 basis points for large banks effective 15 November and later announced another 50 basis points hike for all banks, effective 16 November. PRC's consumer price inflation accelerated to a 25-month high of 4.4% year-on-year (y-o-y) in October. Moody's has upgraded the PRC's credit rating to AA3 from A1 and maintained its positive outlook. Hong Kong, China's economy expanded 6.8% y-o-y in 3Q10. Moody's upgraded Hong Kong, China's government bond ratings to Aa1 from Aa2 with a positive outlook. S&P also upgraded the long term foreign currency-denominated debt of the Philippines to BB from BB-.

Consumer price inflation for October in the Republic of Korea (Korea) and Viet Nam climbed to 4.1% and 9.7% year-on-year (y-o-y), respectively, on the back of a sharp rise in food prices. Last week, the State Bank of Viet Nam increased its base interest rate by 100 basis points to 9.0% while the Bank Indonesia and the Bank of Japan elected to maintain its policy rates. The Indonesian government raised 10-year samurai bonds; Sinotruk HK issued 2-year CNY-denominated bonds while Korea Gas issued USD500 million of 10-year bonds. Petron Corporation issued a 7-year peso global bond while, OCBC Bank (Malaysia) issued 10-year subordinated bond.

The People’s Republic China (PRC) posted GDP growth of 9.6% year-on-year (y-o-y) in 3Q10, the lowest for the year, and had a slight increase in its inflation rate to 3.6% y-o-y in September from 3.5% in August. Last week, the PRC raised its 1-year lending and 1-year deposit rates by 25 basis points each to 5.56% and 2.50%, respectively, while Thailand maintained its 1-day repurchase rate at 1.75%. Also, last week, the Asian Development Bank sold CNY1.2 billion of 10-year bonds in Hong Kong, China; POSCO issued USD700 million of 10-year bonds; and Banco de Oro Unibank sold USD300 million of 5.5-year bonds.

The People's Bank of China has temporarily raised the reserve requirement for four major state-owned lenders and two privately-owned banks to 17.5%. Bank of Korea maintained its 7-day repurchase rate at 2.25% while the Monetary Authority of Singapore announced that it will allow the modest and gradual appreciation of the Singapore dollar. Also, the Thai government has approved the imposition of a 15% withholding tax on interest and capital gains earned by foreign investors from government bonds.

Last week, monetary authorities in Indonesia and the Philippines kept their policy rates at current levels. The Bank of Japan decided to implement a comprehensive monetary easing policy, setting the target overnight call rate to a range of zero to 0.1%. Consumer price inflation in the Philippines eased to 3.5% year-on-year (y-o-y) in September. Foreign direct investment (FDI) in the Republic of Korea fell 13.1% y-o-y in 3Q10. Japan’s current account surplus fell to JPY1.114 trillion in August compared with JPY1.183 trillion a year ago.

Credit Guarantee and Investment Facility (CGIF), a Trust Fund of the Asian Development Bank (ADB), was established by the Governments of 10 ASEAN countries and Japan, China, and Korea (ASEAN+3) and ADB as part of the Asian Bond Markets Initiative (ABMI). CGIF has been established to promote economic development and resilience of the financial markets and to prevent disruptions to the international financial order by developing deep and liquid local currency and regional bond markets. CGIF is looking for top level executives who will be pioneers in establishing the guarantee facility and selecting the initial team of professionals in Manila.

The Philippines issued USD3 billion worth of bonds maturing 2021 and 2034 last week in exchange for shorter-dated bonds, in order to extend its debt maturity profile. SM Investments Corporation offered to swap USD500 million worth of 7-year. In the first 9 months of 2010, Viet Nam’s GDP expanded 6.52% year-on-year (y-o-y). Consumer price inflation eased to 5.8% y-o-y in September in Indonesia and accelerated to 3.6% y-o-y in the Republic of Korea, while Japan’s core consumer price index fell by 1.0% y-o-y in August.

Local currency bond markets in emerging East Asia expanded by an annual 18.8% as of the end of June, with $4.8 trillion in paper outstanding. This large expansion was driven by 24.4% year-on-year growth in the corporate bond market, which has become an increasingly important source of funding for private sector investment. Strong offshore and onshore demand for emerging East Asia’s local currency bonds has reduced the premiums paid on corporate debt over government benchmark bonds and contributed to a flattening in government bond yield curves. Growth in the size of local currency bond markets was led by Hong Kong, China (43.3%), Viet Nam (35.8%), PRC (22.5%), and Thailand (18.4%).

The Finance Ministry of Thailand announced regulatory changes last week to promote foreign investment and capital outflows in an effort to slow the Thai baht’s appreciation. Clearstream announced last week that it would clear and settle yuan securities held outside of the People’s Republic of China (PRC). Bank Negara Malaysia (BNM) has acquired CNY-denominated bonds in a move to diversify its foreign reserve holdings. The Philippine government registered a budget surplus of PHP1.3 billion in August and the current account surplus rose by 16.7% year-on-year (y-o-y) in 2Q10 to USD2.6 billion, or 5.6% of the country's gross domestic product (GDP). The government has also launched USD3 billion bond exchange that will mature in 2021 and 2034. Finally, Hong Kong, China's consumer price inflation accelerated to 3.0% y-o-y in August from 1.3% in July.

Under the ambit of ASEAN+3, the ABMF was established in September 2010 as a common platform to foster standardization of market practices and harmonization of regulations relating to cross-border bond transaction in the region. The ABMF will discuss various bond market issues to further develop liquid and well-functioning bond markets, and effectively channel the region's abundant savings for its increasing investment needs.

Last week, Japan intervened in the foreign exchange market for the first time since 2004, as the yen appreciated to a 15-year high versus the US dollar. On 12 September, the Basel Committee on Bank Supervision more than doubled the capital banks are required to maintain. Last week, Powerlong Real Estate Holdings, a People’s Republic of China (PRC)-based property firm, issued USD200 million worth of bonds, while another PRC-based Road King Infrastructure, priced a USD350 million bond. Foreign direct investment (FDI) in the PRC amounted to USD7.60 billion in August, bringing the PRC’s year-to-date FDI total to USD65.96 billion.

The Philippines sold PHP44.1 billion (USD1.0 billion) of 10-year bonds in the international capital markets last week in the first offshore LCY bond issuance from an Asian country. Japan's economy in 2Q10 expanded at an annualized rate of 1.5%. Japanese Prime Minister Naoto Kan announced details of a JPY915 billion plan for new spending to boost the Japanese economy. In the People's Republic of China, consumer prices increased 3.5% year-on-year (y-o-y) in August, while inflation in the Philippines rose slightly to 4.0% y-o-y in August from 3.9% in July. The Bank of Korea (BOK) kept its policy interest rate steady at 2.25%.

Consumer price inflation accelerated in Indonesia (6.44%), eased slightly in Thailand (3.3%), and remained steady in the Republic of Korea (Korea) at 2.6% y-o-y in August. Policy rates remained steady in Indonesia and Malaysia at 6.5% and 2.75%, respectively. Korea's economy expanded a revised 1.4% quarter-on-quarter in 2Q10. Trade surpluses were recorded in Korea and Malaysia, while trade deficits were posted in Indonesia and Thailand. Meanwhile, manufacturing activity improved in the PRC, Korea, Japan, Singapore, Thailand and Viet Nam.

The Philippine economy grew 7.9% year-on-year (y-o-y) in 2Q10, following a revised 7.8% growth in 1Q10. Thailand raised its 1-day repurchase rate by 25 basis points to 1.75%, while Philippines and Viet Nam kept their respective key rates steady. Consumer price inflation for Japan stood at -0.9% y-o-y in July, while for Singapore, it increased to 3.1% y-o-y in July and remained steady at 8.18% in Viet Nam in August. Last week, People's Republic of China's Central Huijin Investment sold CNY54 billion of dual tranche bonds while Hong Kong, China's PCCW raised USD500 million from selling 5.5-year bonds.

Malaysia’s GDP grew 8.9% year-on-year (y-o-y) in 2Q10, following 10.1% growth in 1Q10, while Thailand's GDP rose 9.1% y-o-y in 2Q10, compared with 12% growth in 1Q10. The People’s Republic of China (PRC) announced it will permit non-resident financial institutions greater access to its interbank bond market. The PRC’s holdings of Korean treasury bonds (KTBs) surged 111% to KRW4.0 trillion in June from KRW1.9 trillion in December. In Hong Kong, China, McDonald’s issued CNY200 million of 3-year bonds at a 3.0% coupon last week. Consumer price inflation for Malaysia climbed to 1.9% y-o-y in July from 1.7% in June, while for Hong Kong, China, it eased to 1.3% y-o-y in July from 2.8% in June.

Consumer price inflation in the People’s Republic of China (PRC) stood at 3.3% year-on-year (y-o-y) in July from 2.9% in June. Singapore registered GDP growth of 18.8% y-o-y in 2Q10, from 16.9% in 1Q10 while Hong Kong, China’s economy expanded by 6.5% y-o-y in 2Q10 from 8% in 1Q10. The Bank of Korea and the Bank of Japan kept its policy rates 2.25% and 0.1%, respectively. Issuance last week included the Philippines’ PHP25 billion retail bond sale and Alliance Global’s USD500 million; USD250 million bonds by Hong Kong, China’s KWG Property Holding Ltd. and SGD350 million bonds by Singapore’s CapitaMalls Asia.

We have expanded the News section in the upper right hand corner of the AsianBondsOnline home page to included selected ADB knowledge products and external research materials. These materials can now be downloaded under the headings “ADB Research” and “External Research”, respectively.

Indonesia registered robust GDP growth of 6.2% year-on-year (y-o-y) in 2Q10, compared with 5.7% in the previous quarter. Consumer price inflation in Indonesia accelerated to 6.22% y-o-y in July from 5.05%. The Bank Indonesia (BI) rate was maintained at 6.5% last week. Issuance last week included USD400 million of 5-year bonds by Country Garden; a total of USD750 million of bonds by the Noble Group, USD500 million of bonds by PSA International, and SGD1.5 billion sukuk by Malaysia's Khazanah.

Deflation continued in Japan as consumer prices fell 0.7% year-on-year (y-o-y) in June. Consumer price inflation in July for the Republic of Korea (Korea) and Viet Nam stood at 2.6% y-o-y and 8.19% y-o-y, respectively. The State Bank of Viet Nam (SBV) announced that its base interest rate will be kept at 8.0%. Korea’s current account surplus expanded 31.9% month-on-month (m-o-m) in June while foreign direct investment (FDI) inflows to Malaysia reached MYR5.05 billion in 1Q10. Manufacturing in the People’s Republic of Chine (PRC) grew at its slowest pace in 17 months as the Purchasing Manager’s Index (PMI) fell to 51.2 in July from 52.1 in June.

Emerging East Asia's local currency bond markets expanded 17.1% year-on-year (y-o-y) to USD4.6 trillion in 1Q10, with corporate bond markets expanding much faster than government markets. The main driver of regional bond market growth in 1Q10 was the rapid expansion of markets in Hong Kong, China; the People's Republic of China; Thailand; and Singapore. Further expansion is expected in the second half of this year as the region's economic recovery continues and companies increasingly tap local currency bond markets as an alternative funding source to bank financing.

The Philippines recorded a wider-than-expected fiscal deficit of PHP196.7 billion for 1H10, above the programmed ceiling for the period due to over-target spending. Consumer price inflation accelerated in Hong Kong, China; and Malaysia while it eased in Singapore. Export growth in the People's Republic of China climbed 43.9% year-on-year to USD137.4 billion in June.

Singapore's GDP growth rate rose to an estimated 19.3% year-on-year (y-o-y) in 2Q10 compared with 16.9% in 1Q10. In the People's Republic of China (PRC), GDP growth eased to 10.3% y-o-y in 2Q10 from 11.9% in 1Q10. Thailand raised its 1-day repurchase rate by 0.25 percentage points to 1.50% last week, while the Philippines and Japan held policy rates steady. Indonesia's sovereign ratings for foreign currency long-term debt and local currency long-term debt were raised by Japan Credit Rating Agency to BBB- and BBB, respectively, last week.

Central banks from the Republic of Korea (Korea) and Malaysia raised their respective key policy rates by 25 basis points last week. Bank Indonesia revised its 2Q10 GDP growth estimate upwards to 6.0% year-on-year (y-o-y); Bangko Sentral ng Pilipinas is expecting 2Q10 GDP growth in the Philippines to exceed the 7.35% y-o-y growth recorded in 1Q10; while Viet Nam's economic growth is expected to accelerate in 2Q10 to 6.4% y-o-y. Malaysia's industrial production index (IPI) rose by 12.5% y-o-y in May, while Singapore's manufacturing sector continued to expand in June, albeit at a slower pace.

Consumer price inflation in June accelerated to 5.05% year-on-year (y-o-y) in Indonesia while it fell to 2.6% y-o-y in the Republic and Korea (Korea), and eased to 3.3% y-o-y in Thailand. The State Bank of Viet Nam kept its base rate steady at 8.0%, effective 1 July. 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. Finally, an update on bond market developments in the People's Republic of China for the first quarter is now available in the PRC market summary section of the AsianBondsOnline website.

Consumer price inflation in Hong Kong, China rose slightly to 2.5% year-on-year (y-o-y) in May from 2.4% in April. In Japan, merchandise exports rose 32.1% y-o-y to JPY5,311 billion in May, compared with 40.4% in April. The Philippine government posted a budget deficit of PHP30.5 billion in May. Moody's raised its sovereign outlook on Indonesia to positive last week.

The People's Bank of China (PBOC) announced over the weekend that it will allow a greater degree of yuan exchange rate flexibility going forward. Central banks from Indonesia and the Republic of Korea (Korea) announced regulations to curb foreign exchange and capital flow volatility. Additionally, the China Banking Regulatory Commission (CBRC) cited growing real estate risks in the People’s Republic of China (PRC) despite measures to keep asset prices in check. Meanwhile, the Bank of Japan (BOJ) unveiled its JPY3 trillion (USD33 billion) lending program with an interest rate equal to the BOJ target rate, which was kept unchanged at 0.1%.

Consumer price inflation in Indonesia, Republic of Korea, and Thailand rose in May while inflation eased in the Philippines. Also, policy rates were held steady in Indonesia, Philippines, Thailand, and Viet Nam. Gross domestic product growth in the Republic of Korea (Korea) accelerated to 8.1% year-on-year. Finally, economic data release points this week include the policy rate for Korea; consumer price inflation for the People's Republic of China; industrial production for Hong Kong, China, and Malaysia; export growth for the Philippines; and current account for Japan.

Philippine GDP growth accelerated to 7.3% year-on-year (y-o-y) in 1Q10, the fastest quarterly growth rate since 2Q07. Consumer price inflation for Singapore rose to 3.2% y-o-y in April from 1.6% in March; Viet Nam's consumer price inflation declined to 9.05% y-o-y in May from 9.20% in April; and Japan's consumer price inflation stood at -1.2% y-o-y in April. The current account surplus of the Republic of Korea (Korea) fell to USD1.49 billion in April from USD1.80 billion in the previous month.

Japan's real GDP grew 4.6% year-on-year (y-o-y) in 1Q10 due to strong exports and a stimulus-fueled recovery in consumption. Singapore's 1Q10 GDP was revised from 13.1% to 15.5% y-o-y according to the final data released by the Ministry of Trade and Industry. Also, Thailand's GDP expanded 12% y-o-y in 1Q10 despite simmering political concerns. Consumer price inflation in Hong Kong, China and Malaysia were at 2.4% y-o-y and 1.5% y-o-y, respectively. Meanwhile, Bank of Japan kept its key interest rate at 0.1% and outlined a new lending program intended to help bolster the economy.

Asian capital markets deliver spectacular gains as the prospect of strong growth combined with the return of appetite for emerging-market assets brings a surge in capital inflows to emerging Asia once again, says this year's issue of ADB's Asia Capital Markets Monitor (ACMM). This issue reviews the recent performance in emerging Asia's stock, bond, and currency markets along with the outlook, risks, and policy implications of that performance. A special theme chapter is titled "Managing Capital Flows: Issues and Policy Challenges for Emerging Asia.

Malaysia registered robust GDP growth of 10.1% y-o-y in 1Q10 - the highest growth rate since 1Q00. Hong Kong, China GDP rose 8.2% y-o-y in 1Q10, compared with 2.5% in 4Q09, while Indonesia's GDP expanded 5.7% y-o-y in 1Q10, compared with 5.4% in 4Q09. Malaysia raised its overnight policy rate by 25 basis points to 2.5% while the Republic of Korea maintained its base rate at 2.0% last week. The People's Republic of China's economic data releases last week included accelerating consumer price inflation, rising property prices, and higher-than-expected new lending in April. Philippine merchandise exports surged 43.7% y-o-y in March.

This new indicator presents the total USD equivalent of bonds outstanding denominated in foreign currency (FCY). It provides a breakdown of the size of FCY-denominated bonds outstanding by government, banks and financial institutions, and corporates.

This new indicator provides the total USD equivalent of gross bond issuance denominated in G3 currencies—US dollar, euro, and Japanese yen. It includes issuance by central governments, central banks, state-owned enterprises, and privately-owned corporates.

Government bond yields rose for all maturities in Indonesia and for most maturities in the Republic of Korea, Malaysia, the Philippines, and Thailand on mounting uncertainty over the outcome of Greece's debt crisis. Consumer price inflation rose to 3.91% y-o-y in April from 3.43% in March for Indonesia, remained steady at 4.4% y-o-y in April for the Philippines, and eased to 3.0% y-o-y in April from 3.4% in March for Thailand. Indonesia revised its budget deficit for 2010 upward last week. Malaysian and Thai exports in March surged 36.4% y-o-y and 41.0% y-o-y, respectively. Foreigners' holdings of Korean LCY bonds climbed 5.9% m-o-m to KRW65.5 trillion in April.

Republic of Korea's (Korea) GDP grew 7.8% year-on-year in 1Q10 from 6.0% in 4Q09. The current account surplus in March rose to KRW1.69 billion on the back of a surge in the country's trade surplus. The Philippines' 1Q10 budget deficit was higher than the targeted PHP110.1 billion deficit for the period, while Thailand has approved a budget deficit equivalent to 4.1% of GDP for the fiscal year 2010/2011. Meanwhile, Japan and Viet Nam kept their policy rates unchanged last week. Consumer inflation rates in Korea and Viet Nam continued to rise while Japan's inflation rate remained in negative territory.

This is the first issue of the Directory of Institutional Investors in the ASEAN+3 Bond Markets. It provides an overview of the legal and regulatory framework in each market, information on outward investment by domestic institutions, as well as information on inward investment by foreign institutions. This publication also contains a brief description of the main institutions in each market.

The People's Republic of China ran a current account surplus of USD297.1 billion in 2009. Consumer price inflation slowed in Hong Kong, China, but accelerated in Malaysia and Singapore at the end of March. Bangko Sentral ng Pilipinas and Bank of Thailand kept their key policy rates unchanged last week. Finally, AsianBondsOnline has introduced two new bond market indicators this week—total bills-to-bonds ratio and a breakdown of LCY government bond market issuance into three categories: by central banks, central governments, and other government entities.

This new indicator shows the ratio of total government bills outstanding to total bonds outstanding. Total bills comprise short-term notes (with original maturities of less than 1 year) issued by central banks and central governments. Total bonds comprise long-term bonds (more than 1 year in maturity) issued by central banks and central governments. It excludes bonds issued by policy banks and state-owned enterprises.

This new indicator shows the gross amount of local currency (LCY) government bond issuance in USD. It provides a breakdown of government bonds issued by central banks, central governments (mainly treasuries), and other government entities. Government bonds include both short-term and long-term issues.

The PRC's GDP growth stood at 11.9% y-o-y in 1Q10, the highest in almost 3 years. The Philippines' PSALM sold a total of PHP30 billion of 5- and 7-year bonds last week. The PRC's Country Garden issued USD550 million of 7-year bonds at 11.25% coupon last week. Sovereign ratings of Korea and Thailand were upgraded and affirmed, respectively. Singapore's exchange rate policy band will shift to a modest and gradual appreciation.

The Philippines is anticipating a lower-than-expected budget deficit for the first quarter of 2010 while consumer prices rose 4.4% year-on-year (y-o-y) in March. Policy rates remained unchanged in Indonesia, the Republic of Korea (Korea), and Japan. Viet Nam's GDP in 1Q10 rose 5.83% y-o-y and Malaysia's industrial production index (IPI) rose 4.9% y-o-y in February.

Consumer price inflation climbed in several emerging East Asian markets last week. Consumer price inflation in February stood at 2.8% year-on-year in Hong Kong, China and at 1.0% in Singapore, while in Viet Nam, consumer price inflation increased to 9.46% in March. The Philippine fiscal deficit grew 14.5% y-o-y to PHP33.2 billion in February from PHP29.0 billion in January. Korea reported real GDP growth in 2009 of 0.2% y-o-y, down from 2.3% in 2008, amid yearly declines in exports and investment.

Emerging East Asia's local currency bond markets expanded 16.5% to $4.4 trillion in 2009, with corporate bond markets expanding much faster than government markets. The main driver of regional bond market growth last year was the rapid expansion of markets in Hong Kong, China; Thailand; and Indonesia. Further expansion is expected this year as the region's economic recovery continues and companies increasingly tap local currency bond markets as an alternative funding source to bank financing.

Singapore's Ministry of Manpower on 15 March reported employment growth for 2009 of 1.3%. Also, Singapore retail sales expanded in January 2.3% year-on-year (y-o-y), while non-oil domestic exports grew 23% y-o-y in February. Last week, Fitch Ratings placed Viet Nam's long-term foreign and local currency rating of BB- on Rating Watch Negative. Finally, the Philippine government reported fiscal deficit of PHP37.1 billion in January, 2.4% lower than in January 2009.

People's Republic of China's (PRC) February consumer price inflation was 2.7% year-on-year (y-o-y), the highest in 16 months. PRC's export and import levels in February also grew by 45.7% and 44.7% y-o-y, respectively. Philippines' merchandise exports rose 42.5% y-o-y in January. Finally, Standard and Poors rating agency (S&P) upgraded its Long-term Foreign Currency rating for Indonesia by one notch to BB from BB-.

Malaysia raised its overnight policy rate by 25 basis points to 2.25%, while Bank Indonesia (BI) kept its benchmark interest rate steady at 6.5%. Consumer price inflation inIndonesia climbed to 3.8% y-o-y in February, but fell for Korea, Thailand, and the Philippines. The Export-Import Bank of Korea sold USD1 billion of 5.5-year senior unsecured bonds, and Hong Kong, China issued HKD3.5 billion of 2-year government bonds. The People's Republic of China (PRC) announced last week that it plans to sell CNY200 billion of bonds in 2010 on behalf of local governments.

The Philippines sold JPY100 billion worth of 10-year samurai bonds and Singapore's Temasek Holdings also issued 15- and 25-year notes worth SGD500 million each last week. Gross domestic product (GDP) growth for 4Q09 recovered in Hong Kong, China; Malaysia, and Thailand. Consumer price inflation for January slowed in Hong Kong, China; and accelerated in Malaysia and Singapore. Finally, Viet Nam's consumer price inflation accelerated to a 10-month high in February.

Korea's local currency bank lending to corporate sector improved as corporate and SME lending increased. Japan and Singapore's economy improved in 4Q09. Indonesia and the Philippines reported balance of payments (BOP) surpluses, while exports surged in Singapore and Thailand. The Philippines' budget deficit widened to a record PHP298.5 billion in 2009 (3.9% of GDP) which is above the government's target of PHP250 billion.

The PRC raised banks' reserve ratios by 0.5 percentage points, following increases in new loans, consumer prices, producer prices, and property prices in January. Indonesia's real GDP grew 5.4% y-o-y in 4Q09. Bank of China (Hong Kong) issued USD1.6 billion of 10-year bonds while Singapore's Temasek Holdings sold SG1 billion of 10-year bonds.

Last week saw a number of G3 currency bond issues in the Republic of Korea, Philippines and Indonesia. Also, the People's Republic of China sold CNY26 billion of 10-year bonds. Consumer prices rose in Indonesia, Korea, Philippines and Thailand while exports surged in Indonesia, Korea and Malaysia. Finally, Thailand further relaxed regulations on investments abroad, foreign exchange hedging transactions and corporate treasury centers.

Fitch Ratings upgraded Indonesia's long-term foreign and local currency issuer default ratings from BB to BB+ as well as the ratings of eight domestic banks last week. Meanwhile, Moody's Investors Service maintained its stable outlook for the Philippines. Economies in Republic of Korea, Philippines and Thailand expanded in 4Q09. Policy rates remained unchanged in Japan, Malaysia, the Philippines, and Viet Nam last week.

The PRC recorded GDP growth of 10.7% y-o-y in 4Q09, compared to 9.1% growth in 3Q09. Consumer price inflation for the PRC; Hong Kong, China; and Malaysia, stood at 1.9%, 1.3%, and 1.1%, respectively, from a year ago in December. Viet Nam plans to issue USD1 billion of 10-year global bonds with an expected yield of 7.0%.

The People's Bank of China (PBOC) raised banks' reserve requirements by 0.5% on 12 January in a move to moderate the rapid loan growth of the past year, and rein in rising asset prices. Last week saw Indonesia sell USD2 billion of 10-year bonds at a 6.0% yield last week, Hong Kong, China also sold HKD2.5 billion of 10-year bonds. Finally, government bond yields declined for all maturities in Hong Kong, China; Malaysia; and Singapore, and for most maturities in Indonesia, Korea, and Thailand. Yields rose for all maturities in Viet Nam and for most maturities in the PRC.

The Philippines made the first international global bond transaction out of Asia this year, raising USD1.5 billion from the offer last week. In December, consumer price inflation accelerated in Indonesia, Korea, Philippines, Thailand, and Viet Nam. Policy rates remained unchanged in Indonesia, the Republic of Korea (Korea), and Viet Nam last week. The People's Bank of China (PBOC) sold CNY60 billion in 3-month bills a bit higher than the previous week's auction but still kept its benchmark 1-year lending rate steady at 5.31%.

The People's Republic of China reported that new loans extended in November totaled CNY294.8 billion, up from CNY253 billion in October. Japan introduced a new JPY7.2 trillion (USD81 billion) stimulus package to bolster employment and provide incentives for energy efficient products. The Bank of Korea held its base rate steady at 2.0%, maintaining an accommodative monetary policy in support of efforts to boost the country's economy.

The Republic of Korea reported much improved GDP growth performance last week - 0.9% on a year-on-year basis - for 3Q09. In November, consumer price inflation accelerated in Korea, the Philippines, Thailand, and Viet Nam, while it slowed further in Indonesia. Both Bank Indonesia and Bank of Thailand kept their benchmark rates steady last week at 6.5% and 1.25%, respectively, while Viet Nam raised its benchmark rate to 8.0%.

Total bonds outstanding in emerging East Asia's local currency bond markets reached a new threshold of USD4.2 trillion at end-September 2009, says the latest issue of the Asia Bond Monitor. Balanced growth, especially in markets outside of the People's Republic of China, and strong corporate bond sector performance, were distinguishing features of the market's growth in 3Q09.

The Philippines reported a budget deficit of PHP266.1 billion for the first 10 months of 2009, exceeding its full-year target of PHP250 million. In 3Q09, the GDP growth rates of Malaysia and Thailand were -1.2% y-o-y and -2.8% y-o-y, respectively. Bond issuances last week include the Philippines' JG Summit Holdings (PHP9 billion of 5-year bonds); Singapore's Temasek Holdings (USD500 million of 30-year bonds); and Viet Nam's Vincom (USD100 million of convertible bonds).

The PRC reported several economic indicators last week, including a 16.1% y-o-y expansion in industrial production, a larger trade surplus of USD24 billion, 29.4% y-o-y M2 money supply growth, and consumer price inflation of -0.5% y-o-y in October. Japan's seasonally-adjusted real GDP expanded by an annual rate of 4.8% and Indonesia's GDP grew by 4.2% y-o-y in October. Government bond yields generally fell in most emerging East Asian markets.

Policy interest rates were held steady in most emerging East Asian markets last week, with the exception of Australia, which hiked its cash rate to 3.5%. Consumer prices are gradually rising in the region, with consumer price inflation rates for the month of October at 2.0% in Republic of Korea, 2.57% in Indonesia, 0.4% in Thailand, 1.6% in the Philippines, and 2.99% in Viet Nam.

In the third quarter, the People’s Republic of China (PRC) posted its fastest economic growth rate this year, on the back of continued credit expansion and stimulus spending. The country’s third quarter gross domestic product (GDP) increased 8.9% year-on-year (y-o-y)—well above the GDP growth rates of 6.11% and 7.9% registered in the first and second quarters of the year, respectively. Industrial production in September rose 13.9% y-o-y, the most in over a year, while September retail sales increased 15.5% y-o-y. GDP growth in the Republic of Korea (Korea) is also rebounding. Korean GDP in 3Q09 rose 2.9% quarter-on-quarter (0.6% y-o-y), leading to market speculation that the Bank of Korea may be considering an increase in its policy rate.

New loans in the People's Republic of China (PRC) surged in September, reaching CNY516.7 billion, which is significantly higher than the August figure of CNY410 billion. In the same month, broad money, as measured by M2, grew by 29.3% year-on-year (y-o-y). Other significant PRC economic data for September included 15.2% (y-o-y) export growth and an 18.9% (y-o-y) increase in foreign direct investment (FDI) inflows to a level of USD7.9 billion. Foreign-exchange reserves in September climbed to USD2.273 trillion, due to a still substantial monthly trade surplus and inflows of foreign capital.

Last week saw several East Asian markets leaving their benchmark rates unchanged from previous levels. Bank Indonesia has decided to keep its benchmark rate steady at 6.5% for the second consecutive month since August of this year. Bank of Korea has also kept its base rate unchanged at 2.0%. Bangko Sentral ng Pilipinas in its meeting held on 01 October retained its overnight borrowing rate at 4.0% and overnight lending rate at 6.0%. The Reserve Bank of Australia's (RBA) move to raise its cash rate by 25 basis points to 3.25% effective 07 October has raised expectations that Asian central banks may follow suit later this year or in early 2010.

Monthly data for LCY bonds outstanding of Indonesia is now available in the Macroeconomic and Credit Indicators table.

Monthly data for LCY bonds outstanding of the Philippines is now available in the Macroeconomic and Credit Indicators table.

Monthly data for LCY bonds outstanding of Thailand is now available in the Macroeconomic and Credit Indicators table.

Monthly data for LCY bonds outstanding of the People's Republic of China is now available in the Macroeconomic and Credit Indicators table.

Monthly data for LCY bonds outstanding of Malaysia is now available in the Macroeconomic and Credit Indicators table.

Signs of economic and industrial recovery were seen in several Asian markets last week, with Viet Nam's 3Q09 GDP expanding by 5.8% y-o-y, PRC's purchasing manager index rising to 54.3 in September, and Japan's industrial output improving by 1.8% m-o-m in August. Consumer prices slightly rose in Indonesia and Republic of Korea while they fell in Japan and Thailand. The PRC initiated the sale of CNY6 billion of Treasury bonds in Hong Kong, China last week.

Issuance activity in the PRC remained strong last week, with large bond sales from the Ministry of Railway, China Development Bank (CDB), and the Agricultural Development Bank of China (ADBC). At the same time, investor demand for cash increased as the deadline approached for subscribing to IPO's that will be listed on the PRC's newly established "start-up" board for IPO's at the Shenzhen Stock Exchange. This heightened demand for cash pushed the 7-day repurchase rate to a high of 1.85% on Friday, before easing after the subscription deadline had passed. Government bond yield curves in the region remain largely unchanged last week.

A number of positive news items came out of Indonesia last week. The government announced that spending for its economic stimulus program would be reduced in 2010 to less than 1.0% of GDP. The total amount of programmed spending for the stimulus program this year is IDR73.3 trillion, which is equivalent to 1.4% of GDP. The World Bank has revised Indonesia's economic growth outlook upward to 4.3% and 5.6% for 2009 and 2010, respectively, due to strong domestic consumption and improved trade performance. Finally, Moody's Investors Service has upgraded the country's FCY and LCY debt ratings to Ba2 from Ba3, with a stable outlook.

Growing corporate issuance along with government funding for economic stimulus packages drove growth in emerging East Asia's local currency bond markets in the first half of 2009, says the latest edition of the Asia Bond Monitor. Local bond markets have emerged as a key source of finance for companies in these volatile times, but they remain dominated by state-owned entities, infrastructure companies and banks.

Economic data released last week by the People’s Republic of China (PRC) points toward a strengthening recovery. Most importantly, cumulative urban fixed-asset investment in the first 8 months of the year increased 33% compared to the same period last year, while August industrial output rose by 12.3% year-on-year (YOY). The most significant new bond issue last week was the USD3 billion of 6 and 10-year maturities – with coupons of 4.625% and 5.75%, respectively - issued by Hutchison Whampoa of Hong Kong. Bonds issued by Hutchison Whampoa are generally considered to be the effective benchmark for most of the Asian G-3 currency bond market.

"The latest Weekly Debt Market Highlights reports that the PRC government agreed to purchase SDR32 billion of IMF notes last week, while important new bond issues included a USD300 million high-yield issue by PRC-based Country Garden, HKD3.5 billion of 2-year government bonds from Hong Kong, China; and JPY30 billion of samurai bonds issued by Korean Development Bank. Korea reported that 2Q09 GDP grew by 2.6% q-o-q, while manufacturing activity improved in the PRC and Singapore. August consumer price inflation accelerated in Indonesia, Korea, and Thailand, but slowed in the Philippines. Government bond yields generally fell in most Asian markets.

Archived issues of the Weekly Debt Highlights are now available via the Weekly Debt Highlights-Past Issues. The archive dates back from the Weekly Debt Highlight's inception in 2 March 2009.

"An update on bond market development for China, People's Republic of, as of 1H2009 is now available.

"An update on bond market development for Hong Kong, China as of 1H2009 is now available.

The latest Weekly Debt Highlights reports that gross domestic product (GDP) growth results in the region remain mixed. The Philippines reported GDP growth of 1.5% y-o-y for 2Q09, while Malaysia and Thailand reported a slower rate of decline for their respective GDP growth rates—compared to 1Q09. Malaysia's GDP growth rate for 2Q09 contracted at a y-o-y rate of 3.9%, compared to a 6.2% decline in 1Q09. Thailand’s 2Q09 GDP fell by 4.9% y-o-y, after declining by 7.1% in 1Q09.

"An update on bond market development for Indonesia as of 1H2009 is now available.

"An update on bond market development for the Republic of Korea as of 1H2009 is now available.

"An update on bond market development for Malaysia as of 1H2009 is now available.

"An update on bond market development for the Philippines as of 1H2009 is now available.

"An update on bond market development for Thailand as of 1H2009 is now available.

"An update on bond market development for Viet Nam as of 1H2009 is now available.

Economic data releases last week reaffirmed the progress of the economic recovery in the People’s Republic of China (PRC). Industrial output in July rose 10.8% year on-year (y-o-y), compared to the 10.7% and 8.9% growth registered in June and May, respectively. July’s increase, however, was below expectations of an 11.5% rise. Total urban fixed-asset investment in the first 7 months of the year increased 32.9% y-o-y and July retail sales increased 15.2% y-o-y. New loans in July fell to CNY355.9 billion—less than one quarter of the more than CNY1.5 trillion in new loans extended in June—as banks moved to limit their exposure to bad loans.

Yet another week of active FCY and LCY bond issuance in Asia was highlighted by huge issuances from Malaysian oil company Petroliam Nasional Berhad (Petronas) and Indonesia's state utility firm PT PLN. Petronas issued bonds amounting to USD4.5 billion, the largest corporate bond offering in Asia in the last 5 years: USD3 billion 10-year conventional notes with a coupon of 5.25% and USD1.5 billion 5-year sukuk (Islamic bonds) at 4.25%. Both were priced to yield 162.5 basis points over comparable US Treasuries. PT PLN issued USD750 million in bonds with a 10-year maturity and priced to yield 8.125%. Japan issued JPY600 million of 30-year government bonds with a coupon of 2.3%. In Singapore, property developer CapitaLand issued SGD1.1 billion of 7-year convertible bonds to fund new investments and working capital.

The latest edition of the Weekly Debt hightlights reports taht demand for new bond issues remained robust with a wide variety of new offerings in both USD and LCY coming to market. In the USD market, the Korea National Oil company (KNOC) launched its first ever USD bond issue of USD1 billion with a coupon of 5.375% while Woori Bank issued USD800 million of senior bonds maturing in February 2015. The Hong Kong Mortgage Corporation (HKMC), a quasi-government entity, priced USD500 million in 5-year bonds paying a coupon of just 3.5%. Malaysia's state oil company, Petronas, is planning to issue USD-denominated 5-year sukuk (Islamic bonds) and 10-year conventional notes. This will be Petronas’ first US Dollar issue since 2002. Thailand's largest oil conglomerate, PTT, is raising the size of its bond issue to THB35 billion from THB30 billion through a “green shoe” option worth THB5 billion.

The latest edition of the Weekly Debt hightlights reports taht demand for new bond issues remained robust with a wide variety of new offerings in both USD and LCY coming to market. In the USD market, the Korea National Oil company (KNOC) launched its first ever USD bond issue of USD1 billion with a coupon of 5.375% while Woori Bank issued USD800 million of senior bonds maturing in February 2015. The Hong Kong Mortgage Corporation (HKMC), a quasi-government entity, priced USD500 million in 5-year bonds paying a coupon of just 3.5%. Malaysia's state oil company, Petronas, is planning to issue USD-denominated 5-year sukuk (Islamic bonds) and 10-year conventional notes. This will be Petronas’ first US Dollar issue since 2002. Thailand's largest oil conglomerate, PTT, is raising the size of its bond issue to THB35 billion from THB30 billion through a “green shoe” option worth THB5 billion.

The latest edition of the Weekly Debt hightlights reports that economic recovery is underway in several Asian economies. The Republic of Korea posted second quarter GDP growth of 2.3% q-o-q, which was the fastest pace in more than 5 years, due to a strong demand from the People's Republic of China (PRC). Thailand's merchandise exports also showed improvement in June with growth of 5.8% m-o-m. On an annual basis, both Japanese and Thai exports fell in June, but at a slower pace of decline compared to the previous month.

"""Emerging East Asia has entered the transition from recession to a possible V-shaped recovery, with growth dropping sharply this year before returning to 2008 levels in 2010,"" says ADB's July issue of the Asia Economic Monitor (AEM), launched 23 July in Bangkok.

Emerging East Asia has entered the transition from recession to a possible V-shaped recovery, with growth dropping sharply this year before returning to 2008 levels in 2010, says ADB's July issue of the Asia Economic Monitor (AEM), launched 23 July in Bangkok.

"Emerging East Asia has entered the transition from recession to a possible V-shaped recovery, with growth dropping sharply this year before returning to 2008 levels in 2010, says ADB's July issue of the Asia Economic Monitor (AEM), launched 23 July in Bangkok.

To further boost corporate bond issuances the Malaysian government established the national financial guarantee institution, Danajamin Berhad which will provide financial guarantee insurance for issues of private debt and Islamic securities.

The latest edition of the Weekly Debt Highlights reports that a number of important FCY bonds sales from the Philippines, Indonesia and the Republic of Korea as well as several LCY bond issues from the People's Republic of China, Malaysia and Thailand.

The latest edition of the Weekly Debt Highlights reports that there were several large bond issues as well as bond auctions falling short of target. In the People's Republic of China, the Bank of China sold a total of CNY40 billion in floating-rate and step-up notes, and energy conglomerate Shenhua Group issued CNY20 billion in 5-year bonds. Additionally, five local governments, including those of the Xinjiang region and the city of Shenzhen, sold a combined CNY11.9 billion in 3-year bonds. In the Republic of Korea, the Export-Import Bank of Korea issued USD1.5 billion in 5.5-year bonds. Of particular note were the Treasury auctions of the PRC and Viet Nam. For the fifth consecutive time since March, Viet Nam's State Treasury failed to sell VND1.5 trillion (USD84.3 million) of bonds as investors required higher yields.

The latest edition of the Weekly Debt Highlights reports that the People's Bank of China will on a pilot basis, permit firms to use the yuan for the settlement of international trade transactions. Malaysia's Prime Minister announced measures that end restriction on foreign investment in most sectors of the economy and open up the investment management and brokerage industries, as well as property, ending requirements for 30% ownership by ethnic Malays.

Singapore's CPI inflation, foreign exchange rate, external reserves and 10 yr. gov't bond rate for May are now available via the Macreconomic and Credit Indicators

The latest edition of the Weekly Debt Highlights reports that the Indonesian Bond Pricing Agency (IBPA) announced last week that it will soon begin to provide daily reference prices for corporate bonds and ijarah type of sukuks. This move is expected to help improve transparency and make Indonesia's debt market more attractive to investors. Indonesia's corporate bond market is generally illiquid. IBPA noted that on any given day less than 5% of issues are traded, which deters investors from entering the market and makes it harder for companies to raise funds. The availability of a reference price should help firms planning to issue bonds more accurately estimate their cost of borrowing and provide a benchmark for those seeking to trade bonds. Plans to provide reference prices for other types of sukuks and other assets - such USD-denominated bonds, bond futures, and interest rate futures- are also being considered by IBPA.

AsianBondsOnline now tracks previous day changes, previous week changes and year-to-date changes for selected government bond yields, major currencies, local interest rates and policy rates.

The Market Watch section on AsianBondsOnline's regional and individual market pages provides latest closing rates as well as the changes from previous day, week, month-to-date (MTD) and year-to-date (YTD).

The latest edition of the Weekly Debt Highlights reports that upcoming issues were anounced in the Philippines, Viet Nam, Indonesia and the Republic of Korea. The Government of the Philippines is considering a Samura bond issue worth up to USD1.5 billion given the rise of its budget deficit target to PHP250 billion, or 3.2% of GDP, while Robinson's Land Corporation plans to issue PHP5 billion worht of 5- and 7-year bonds. Additionally, the government of Viet Nam is planning to issue around USD1 billion in the domestic market to finance its budget deficit and large stat projects. In Indonesia, PT Telekomunikasi Indonesia Tbk is planning to issue between IDR1 trillion worth of bonds in 2010 to funds its capital expenditure requirements while the firms' cellular unit is also planning to issue LCY and FCY bonds next year. Meanwhile, Indonesia's Permata Bank sold USD100 millio of 12-year subordinated medium-term notes to finances its debt for business expansion and to strengthen its capital structure.

The latest edition of the Weekly Debt Highlights says that data released provided further indications that an economic rebound is underway in the People's Republic of China. For the first five months of the year, urban fixed-asset investment surged 32.9% y-o-y to CNY5.352 trillion. Property sales also posted strong gains. In the first five months of the year, the value of property sales climbed by 45.3%, y-o-y, which was the largest increase since February 2006.

AsianBondsOnline povides the Feedback section for visitors who might have questions about the Asian bond markets as well suggestions on how to improve the website.

The latest edition of the Weekly Debt Highlights reports that a number of important new issues came from Japan, Republic of Kroea and the Philippines. Japan's Nippont Telegraph and Telephone Corporation sold a total of JPY170 billion worth of 5- and 10-year bonds. Korea's Kookmin Bank tapped the international bond market and sold USD300 million worth of 3-year Reg-S bonds due in June 2012. In the Philippines, Land Bank of the Philippines raised PHP6.9 billion of subordinated notes, while SM Investments Corporation's PHP5 billion bond issue was oversubscribed. Furthermore, Thailand's Fiannce Ministry announced that it will issue savings bonds initially worth THB30 billion, which is part of the THB400 billion the government intends to borrow domestically.

China's 1Q GDP is now available via the Macreconomic and Credit Indicators

Bank Indonesia's reference rate is now available via the Macreconomic and Credit Indicators

Japan's vehicle sales, end of period exchange rates, M1 and M2 growth, international reserves overnight borrowing rate and 10-year gov't rate as of June are now available via the Macreconomic and Credit Indicators

The Bank of Korea's policy rate as of June is now available via the Macreconomic and Credit Indicators

The Philippines' CP inflation, end of period exchange rates, international reserves, overnight borrowing rate and 10-year gov't bond rate are now available via the Macreconomic and Credit Indicators.

Singapore's CPI inflation, foreign exchange rate, external reserves and 10 yr. gov't bond rate for May are now available via the Macreconomic and Credit Indicators

Thailand's consumer price index for May is now available via the Macreconomic and Credit Indicators

Vietnam's consumer price index and industrial production for June is now available via the Macreconomic and Credit Indicators

Macroeconomic, balance of payments and government credit indicators are updated on a monthly and quarterly basis.

The latest edition of the Weekly Debt Highlights features the Asian Bond Monitor - Summer Edition's major theme. Growth rates in Asia's LCY bond markets stabilized in 1Q2009, as governments implemented fiscal stimulus packages to offset economic slowdowns, central banks begal to issue for broader monetary management purposes, and corporate issuance recovered. The emerging East Asian bond market grew by 1.1% in 1Q2009 compared with the last quarter of 2008.

The Summer Edition of the Asian Bond Monitor reflects that Emerging East Asia's local currency bond markets showed signs of stabilization in the first quarter of 2009 as governments implemented fiscal stimulus packages, corporates raised funds and banks issued more subordinated debt.

The latest edition of the Weekly Debt Highlights says that several Asian countries reported significant declines in their GDP growth rates in the first quarter of 2009. On a year-on-year basis, real GDP growth rates for Japan, Singapore, and Thailand, were -9.7%, -10.1% and -7.1%, respectively. Japan's first quarter contraction was brought about by a sharp fall in exports and weaker domestic demand. In Singapore, the negative growth is attributed to a plunge in expenditure, especially domestic investments and net exports. In Thailand, the slump in exports and manufacturing activity contributed to the fall in the country's first-quarter GDP.

ADB's Handbook on International Best Practices in Credit Ratings is now published in AsianBondsOnline. Credit Ratings. ADB believes it is essential for Asian Domestic Credit Ratings Agencies (DCRAs) to adopt international best practices, which will enhance the comparability of ratings among credit agencies - domestic and global - and give investors greater confidence in DCRA's ratings. The handbook should serve as a reference for regulators with oversight responsibilities for the regions DCRA's.

The latest edition of the Weekly Debt Highlights says that corporate bond issuance remains a dynamic story in the region. Two examples occurred in the People's Republic of China and the Philippines, while progess continued on planned issues in Indonesia, Republic of Korea, and Thailand. China National Petroleum Corporation sold USD1 billion of 3-uear floating notes, while in the Philippines, Rizal Commercial Banking Corporation's PHP4 billion lower Tier 2 subordinated notes were oversubscribed. Finally, the Malaysian government announced the creation of Danajamin Nasional Berhad late last week, a national financial guarantee institution that will provide credit enhancement for corporate bond issues.

The latest edition of the Weekly Debt Highlights reports the IMF said that Asia's economies may face the prospect of a slower than expected recovery of their export sectors, as the US and other advanced economies may not immediately respond to pump-priming initiatives of their respective governments. Thus, the efforts of Asian governments to promote domestic consumption will become increasingly important.

The latest edition of the Weekly Debt Highlights reports that the annual meeting of the Asian Development Bank (ADB) in Bali yielded a number of important developments: First, ADB announced that its Board of Governors approved a 200% increase in ADB's capital to USD165 billion, which the Board expects will permit ADB to extend about USD32 billion in loans in 2009-2010, compared with initial plans to disburse USD22 billion over the same period.

The latest edition of the Weekly Debt Highlights reports the Group of Seven (G7) countries announced that they are expecting economic activity to recover later this year, although it will be a weak recovery in the coming months.

"""The new AsianBondsOnline was launched on 21 April 2009 in Tokyo, Japan during the Asian Capital Markets Conference. AsianBondsOnline is part of the ABMI. It is a one-stop clearinghouse of information on sovereign and corporate bonds. It presents both regional and market-specific information in a structured format, giving market participants and potential investors a clear perspective of the current market. Government and private sector initiatives to enhance market depth and liquidity are also detailed.

The first edition of ADB's Asia Capital Markets Monitor (ACMM) shows that Asia's capital markets are starting to stabilize and the region's relatively resilient economies should help them recover as the global crisis ebbs and investor appetite returns.