If there has been one bright spot in capital markets amid the global gloom then it is surely the Asian local bond market. Even as wider capital markets issuance has shrunk, many Asian countries are on track to post record issuance this year. The success of the region’s bond markets can be traced back to the dark days of the Asian financial crisis, more than a decade ago now, when the region’s addiction to short-term foreign debt caused many currencies to collapse. Determined not to repeat the disaster of this so-called “double mismatch,” of...Read more
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Asian high-yield, an asset class that vanished in late 2007 when the financial crisis emerged, is showing signs of resuscitation, with two deals from Indonesia indicating investors’ willingness to move down the region’s credit curve. Despite this bright outlook, the primary sector will be restricted to names with the best metrics and name recognition.
The Samurai market's landscape changed dramatically after Lehman Brothers collapsed as risk-averse Japanese investors' tolerance for foreign credits deteriorated. It took Triple A rated government guarantees from the region’s most respected sovereigns to revive the market.
This year is set to be a record-breaking one for China’s domestic bond market, not only in terms of issuance but also in terms of the rising importance of bond financing in helping China maintain economic growth amid the global financial downturn.
The Panda bond is a great idea with a problem: it is all talk and no execution. From an issuer’s perspective, the appeal is immense. China has vast liquidity looking for a home; borrowers are starved of opportunities in the world’s traditional bond markets as investors there remain risk averse or short of cash. Putting the two together, with foreign issuers raising funds in renminbi on the mainland, seems a great idea, but it just will not gain any traction.
A growing number of banks and states in Australia which have access to the government guarantee on their funding are opting not to use it. Why? It is really about making sure issuers do not lose touch with an investor base that has supported them over the long term and who they will need to tap again when debt markets eventually regain their shape.
The corporate bond market in Thailand is heading for a record year, making it one of the region's very few active debt markets. The Thai Bond Market Association has projected a total issuance of over Bt300bn (US$8.8bn) in corporate bonds for this year, including some Bt150bn of issues sitting in the pipeline for the second half.
Indonesia’s rupiah bond market is on course for a year of growth. By July 22 deals worth US$2.79bn had been raised this year, not counting government issuance, according to data from Thomson Reuters.
Strong demand is enabling South Korean banks to get dollar bonds away at tight prices, even without a government guarantee, but can it last and, if so, for how long?
Newly established financial-guarantee insurer Danajamin Nasional threw open its doors to applications on June 30 and demand has been high. If all the applications and enquiries that have been received to date were to be approved, the government-backed financial guarantee insurer would have used up its entire guarantee quota of M$15bn.