Source: Reuters/Vivek Prakash An acrobat walks prepares to get off a safety net after a show at the Rambo Circus in Mumbai. Fears of higher interest rates have dominated the fixed-income market over the past few months and prompted investors to keep withdrawing funds from this asset class. No market was spared in the selloff that started in May after Ben Bernanke indicated that the US Federal Reserve might start cutting back purchases of Treasury bonds and mortgage-backed securities as early as

Source: Reuters A cook arranges baskets of newly made dumplings at a restaurant in Shenyang. After two years of record bond issuance in US dollars, euros and yen, Asia’s debt capital markets stalled in June. A sudden rise in benchmark yields was a reminder that the region is still not immune to global volatility. As investors calculated their losses, issuers revisited their funding plans and bankers tried to please both sides, market participants were asking themselves if the volatility could re

Source: Reuters/Paul Yeung People are seen in the reflection of a polished wall on a rainy day in Hong Kong. After the first half of 2013 broke all manner of records for the volume of debt offerings from Asia – not to mention revenues for underwriters – the inevitable correction in Asian credit was always going to be painful. The surging volatility in the US Treasury market in May–June was a nasty wake-up call for anyone assuming Asian bonds were a one-way bet. Prices tumbled across the board, r

Source: Reuters/Daniel Munoz Australian players wait for an umpire’s decision during an international rugby union test match. Australia may not have expected its mortgage-backed debt market to need government support for so long, but the state’s continued assistance was instrumental in ensuring the survival of an important subset of the country’s capital markets. The same, however, cannot be said of elsewhere in Asia, where the structured finance markets have been reduced to a thin patchwork of

Source: Reuters/Lee Jae-Won A South Korean soldier patrols as vehicles returning from North Korea’s inter-Korean Kaesong Industrial Complex back to South Korea arrive at a checkpoint on the Grand Unification Bridge. The introduction of loss-absorbing bank capital across Asia has been a long time coming. Most countries in the region began to adopt Basel III standards from January 1 this year, but Asian lenders are biding their time before pushing out bank capital that complies with new requiremen

Source: Reuters Parents wait outside a school as their children take the National College Entrance Exam in Huaibei. The arrest of a number of bankers and brokerage executives earlier this year proved to be only the first step in a nationwide clampdown on China’s fast-growing bond market. Investigations into alleged profit-skimming, involving a practice known as substitute holding, marked the start of a co-ordinated effort to eliminate irregular transactions and improve transparency. Each market

Source: Reuters/Shohei Miyano A US$100 bill and ¥10,000 notes are spread in Tokyo. Samurai issuance continued unabated when the offshore dollar bond primary market shut resolutely after the US quantitative-easing scare in May. The Samurai market has been able to provide size, investor diversification and, in some cases, after-swap cost savings to issuers. Still, it remains a deeply conservative arena from the credit perspective. Implied funding costs in the Samurai market rose sharply following

Source: Reuters/Supri Vehicles are seen stuck in a traffic jam during rush hour in Jakarta. After record volumes in the first half of the year, hopes for a pick-up in high-yield issuance in the rest of 2013 are quickly fading. Expectations that the US Federal Reserve will begin to withdraw its monetary stimulus have weakened risk appetite among investors, and Asia’s sub-investment-grade issuers are facing far higher funding costs. The second half of the year is shaping up to be very different fr