The rise of domestic debt markets and the fall of G3 issuance has been the big theme in Asian bond markets this year as local markets have proved impressively resilient to the turmoil in global credit markets and demonstrated some newfound maturity. Funding in G3 currencies is on track for it lowest level in five years, while domestic issuance is on track for a record year and the rise of Asia’s local markets looks to be a trend that will continue. Asian borrowers have shown their growing sophistication in taking advantage of this new dynamic...Read more
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Funding in the G3 currencies has long been the staple for Asia’s borrowers as steadily increasing issuance volumes testify. The credit crunch then emerged in July 2007 to crimp severely G3 issuance, but Asian domestic markets have picked up the slack in a rising volume trend that looks likely to continue.
Indian debt markets have long been an underdog to their equity counterparts but gradually changes are being introduced to remove this disparity and offer a level playing field.
The year’s issuance theme from Australia banks has been adventures in the Samurai market. The top four Australian banks have raised ¥489.9bn so far in several groundbreaking deals. Indeed such has been the warm reception for Australian banks that they all plan to become regular Samurai issuers.
The Malaysian market demonstrated its remarkable resilience when Binariang GSM sealed a chunky M$12bn (US$3.7bn) Islamic MTN in December last year. Despite fears that the size would prove indigestible, the deal went smoothly, reflecting how deep liquidity was and how keen local investors were to diversify from the usual power and toll-road paper. While ample liquidity was a persuasive factor, more pertinent was the savings that foreign issuers could make in the early months of 2008. Korean borrowers found that the cost of selling bonds in...
South Korean G3 issuance – deals denominated in US dollars, yen and euros – has been battered in line with bond markets elsewhere in the region. But while half-year issuance is almost half last year’s levels, volumes are only marginally lower than for the corresponding periods in 2006 and 2005.
Some decent-sized deals are getting away in the Philippines peso bond market. There’s not much going right in the country’s stock market or economy, but at least it is clear the local debt markets are maturing.
ANZ has demonstrated its strength and sophistication as a borrower consistently through the credit crunch. It says something that, despite ambitious capital raising requirements, it has almost completed its 2008 funding programme already without having to pay through the nose for any of it.
Kexim Bank has been a stunningly active borrower this year, tapping markets and currencies ranging from the majors right through to domestic Latin American markets.
There was a time when Vietnam was something of a darling of the global credit markets. Not anymore. Worries about the state of the Vietnamese economy have sent investors elsewhere.