SEOUL, Jan 8 (Reuters) - South Korean government bond prices
soared on Thursday, wiping out heavy losses in the previous
session, as remarks by President Lee Myung-bak fanned hopes for a
bold domestic rate cut on Friday.
The nation's President Lee held the first economic crisis meeting at the 'war room' of the presidential office on Thursday and called for preemptive measures to counter a slump facing Asia's fourth-largest economy.
The yield on benchmark 5-year treasury bonds tumbled 20 basis points to 3.72 percent while March treasury bond futures surged 63 ticks to 113.08.
Apart from Lee's warning against an economic crisis, the finance ministry added to the bleak outlook, projecting no immediate improvement in the nation's output and exports as recession risk rises.
Nomura Securities piled on the agony, presenting a pessimistic projection with a 2 percent contraction for South Korean economy this year.
'President Lee's remarks provided a catalyst to the bond market, spurring hopes that the central bank may cut more than the widely-expected 50 basis points tomorrow,' said Yang Jin-mo, a fixed-income analyst at SK Securities.
The market yield on three-month certificates of deposit (CDs) plunged 67 basis points to a record-low 3.25 percent as the Industrial Bank of Korea issued 150 billion won ($114 million) in three-month CDs at 2.90 percent, signalling a thaw in the credit crunch.
close prev close
5
yr treasury bonds 3.72 pct 3.92 pct
3
yr treasury bonds 3.26 pct 3.45 pct
1
yr monetary stabilisation bonds 2.74 pct 3.00 pct
3
mth certificates of deposit 3.25 pct 3.92 pct
Average call rate 2.99 pct 2.60 pct
6
mth *KORIBOR 4.25 pct 4.54 pct
~ not quoted
* Korea interbank offered rate
(Reporting by Seo Eun-kyung; Editing by Keiron Henderson)
((eunkyung.seo@thomsonreuters.com; +82 2 3704 5648; Reuters Messaging;eunkyung.seo.reuters.com@reuters.net)
($1=1315.5 Won) Keywords: MARKETS KOREA BONDS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The nation's President Lee held the first economic crisis meeting at the 'war room' of the presidential office on Thursday and called for preemptive measures to counter a slump facing Asia's fourth-largest economy.
The yield on benchmark 5-year treasury bonds tumbled 20 basis points to 3.72 percent while March treasury bond futures surged 63 ticks to 113.08.
Apart from Lee's warning against an economic crisis, the finance ministry added to the bleak outlook, projecting no immediate improvement in the nation's output and exports as recession risk rises.
Nomura Securities piled on the agony, presenting a pessimistic projection with a 2 percent contraction for South Korean economy this year.
'President Lee's remarks provided a catalyst to the bond market, spurring hopes that the central bank may cut more than the widely-expected 50 basis points tomorrow,' said Yang Jin-mo, a fixed-income analyst at SK Securities.
The market yield on three-month certificates of deposit (CDs) plunged 67 basis points to a record-low 3.25 percent as the Industrial Bank of Korea issued 150 billion won ($114 million) in three-month CDs at 2.90 percent, signalling a thaw in the credit crunch.
close prev close
5
yr treasury bonds 3.72 pct 3.92 pct
3
yr treasury bonds 3.26 pct 3.45 pct
1
yr monetary stabilisation bonds 2.74 pct 3.00 pct
3
mth certificates of deposit 3.25 pct 3.92 pct
Average call rate 2.99 pct 2.60 pct
6
mth *KORIBOR 4.25 pct 4.54 pct
~ not quoted
* Korea interbank offered rate
(Reporting by Seo Eun-kyung; Editing by Keiron Henderson)
((eunkyung.seo@thomsonreuters.com; +82 2 3704 5648; Reuters Messaging;eunkyung.seo.reuters.com@reuters.net)
($1=1315.5 Won) Keywords: MARKETS KOREA BONDS
COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
© 2009 AFX News
