亚洲债券供需监测报告

Asia Fixed IncomeAsia Macro Strategy Date 11 August 2025 Notes Bond Demand-Supply Monitor Joey Chung Highlights from this edition of our monthly Asia bond demand-supply monitor; Strategist+65-6423 8298 1.We expect some upward adjustment in yields for newly issuedCGBsas aresult of the recent VAT changes, though the impact on bank demand forbonds will likely be limited given poor loan growth. 2.Risinglifer premiums and EPF payrolls,together with changes inregulation, should support the ultra-long end of theIGBcurve; we are longthe 30Y.3.Front endIndoGBscontinue to benefit from declining SRBI rollovers, butwe are still lacking pension fund demand for the back end.4.Despite stepping up the pace of issuance, the run rate forKTBs continuesto be below its average in recent years.5.The strength of retail bond issuance clears the last major supply hurdle forthe year, and supports our constructive view onRPGBs.6.Strong domestic demand continues to flatten theThaiGBcurve withsecondarymarket bids outstripping tactical pull back in auctionparticipation. Hazel Lai Macro Strategist+852-2203-6150 Vaninder Singh, CFAMacro Strategist+65-6423 8947 Perry KojodjojoStrategist+852-2203 6153 Sameer GoelMacro Strategist+65-642-36973 Bryant XuStrategist+65-6423 5558 China nImpact of VAT changes. The MoF has announced that VAT will be levied onCGBs, LGBs and financial bonds issued from 8 August onwards. Assetmanagers will be subjected to a 3% VAT rate, while the proprietary tradingof financial institutions (e.g. banks) will face a 6% rate. We estimate thatCGB yields will likely increase by 4-13bp in response to these changes.Despite the higher VAT, the overall impact on banks' demand should belimited given relatively weak loan growth (compared with the pace ofnominal GDP growth), and which should continue to anchor the front endof the bond curve. See Asia Macro Strategy Notes: The implication of VATresumption on bond market for details. Figure 1: Government bond yieldsare estimated to rise by 4-13bp toadjust for VAT nKey auctions: 3Y CGB auction on 14 August; 10Y and 30Y CGB auction on22 August. These are the three new CGB issuances schedule for after thelatest change in VAT regulation. India nLife insurance first premiums and EPF payrolls continue to rise stronglyon a sequential basis. We show in Figure 2 and Figure 3 that the IGB10Y/30Y curve is not yet reflecting this reality and expect the 10Y/30Y spread to compress to 30bp from the current 65bp. nMoreover, changes in regulations by the RBI that went into effect in Mayallow for additional bond forward products to be issued by lifers, allowingfor leveraged demand for the back end of the curve.Now that premiums areindeed starting to rise, we should start to see benefits stemming from theregulation change. nWe retain our long-standing view thatIGB-10Y should break sub-6%.(1)We continue to expect the market to price in a continuation of the RBI’seasing cycle – something that is not yet fully reflected in front-end pricing.(2) History suggests no more than 20bp of steepening is likely if rate cuts areindeed delivered. Our view is that even this may not occur as India’s savingsget increasingly more financialized,reducing term premium. Inflation riskpremium should also reducewith RBI gaining further credibility onachieving its inflation target. nGiven the above considerations we see 30Y yield working out as 5-5.25%for policy + 100bp for 10Y spread over policy + 30bp for the 10Y/30Y spread.We hold our long 30Y IGB position, FX hedged, targeting 6.5%.See IGB:Switch to 30Y from 10Y for more details. IndonesiaDemand dynamics continue to favor the front end of the curve, and are nhelping sustain steepness in the curve.Weekly SRBI maturities for theremainder of the year average IDR17tn. While the more sizeable amongmaturities are already behind us (Figure 4); however, SRBI rollover rateshave declined from 70% in H1 to 60% over the last three months, indicatinga stronger impetus from BI to ease liquidity conditions. Banks, which own70% of SRBI, are likely to reallocate capital into front-end IndoGBs (5Y andbelow) given the increasing spread of bond yields over SRBIs. nInspite of the steepness in the curve, we have refrained from gettingengaged in the back end of the curve. A key reason for the same is thatpension contributions on the whole are still suppressed, in turn keepingbond demand from pension funds weak(Figure 5). We are watching thisdata closely to become more constructive – similar to our views on Indiadescribed above. Korea nDespite the larger than expected issuance (Figure 6), the run rate forKTBs remain below average due to additional supplementary budgets.Asof end-July, gross issuance was running at 58% of the annual target, vs itsthree-year average of 72%. For August, the pace of issuance is againexpected to remain below-average. The MoEF plans to issue KRW 18.8tn ofKTBs (including 0.3tn of conversion offer). Note that an additional 2.8tn wasissued