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NEWS UPDATES Asean Affairs     October 24,  2016  

Bond issuances rise as banks fail to pass on rate cuts:

A lack of response to interest rate cuts in the banking industry in the first nine months of 2016 has driven more companies to issue debt securities in capital market, a Bank Indonesia (BI) official has said.

BI economic and monetary policy executive director Juda Agung said banks’ reluctance to cut their lending rates had persuaded companies to opt for bonds over bank loans to meet their financing purposes, with issuances up by around Rp 20 trillion (US$1.53 billion) compared to the same period in 2015.

"Bond issuances reached Rp 65.5 trillion as of September, while the full-year figure last year was only Rp 46 trillion," he said in Jakarta on Thursday.

Around 33.59 percent of the debt instruments issued so far, he continued, were aimed at refinancing, not only corporate bonds but also bank loans.

"On the buyer side, many mutual fund and pension fund managers are looking at bonds as they still provide better yields compared to those provided by bank deposits," Juda said.

The central bank has cut the BI reverse repo rate by 150 basis points (bps) to 4.75 percent in October to stimulate banks to lower their interest rates. Accumulatively, the benchmark interest rate has been slashed by 275 bps from 7.5 percent in early January.

However, banks tend to be slow in adjusting their lending rates, while quick to cut their deposit rates. During January to August, the banking industry has cut deposit rates by 108 bps, while only slashing lending rates by 60 bps.

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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