Philippine, Indonesian bonds weaken<\/p>\n
HONG KONG (Dow Jones): Philippine and Indonesian benchmark
\nbonds dipped this week because of continued social, political and
\neconomic concerns, while other Asian benchmark bonds held firm in
\noverall thin summer trading.<\/p>\n
The spread on Indonesia's 2006 benchmark against equivalent
\nU.S. Treasurys widened by 60 basis points Friday from a week ago
\nwhile the spread of the Philippines' 2008 bond widened by 45
\nbasis points.<\/p>\n
In the case of the Philippines, sentiment was weakened earlier
\nthis week when the government suggested that it would exceed its
\nbudget deficit forecast this year, said one trader in Manila.<\/p>\n
The prospect of fresh supply weighed on the Philippines'
\nexisting bonds, the trader said.<\/p>\n
According to press reports, the Philippines plans to raise
\nUS$500 million through the sale of bonds to Philippine investors
\nholding dollars locally in the form of foreign currency
\ndepository units.<\/p>\n
"All the bad news is coming on top of the old problems," the
\ntrader said.<\/p>\n
In addition to the new funding requirement, the government has
\nto rebuild investor confidence that has been battered by the
\nprotracted Muslim insurgency in Mindanao, several bomb blasts and
\nthe hostage crisis in Jolo Island.<\/p>\n
In Indonesia, investor confidence suffered from Coordinating
\nMinister for Economy and Finance Kwik Kian Gie's statement that
\nthe government is considering scrapping debt-settlement
\nagreements signed with a number of Indonesia's top business
\ngroups.<\/p>\n
Recent threats from the U.S. government to take legal action
\nagainst the Indonesian government to recover $290 million
\nprovided an additional reason for investors to pull their money
\nout of Indonesian bonds.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/philippine-indonesian-bonds-weaken-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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