ADB funding team set for record year

The Asian Development Bank’s 50th anniversary year comes at a busy time for Takehiko Nakao. Having overseen a revamp of the bank’s capital resources in 2015, the ADB president led a near 20% jump in operations in 2016 to a record US$31.5bn of loans and other commitments. He began a new five-year term in November, and is deeply involved in a strategic review that will guide the bank’s operations until 2030. For Nakao, the half-century landmark is more than just an excuse for a celebration. He is a firm believer in the power of knowledge, and has...

For all the hype around the arrival of new multilateral lenders, concessional funding for Asian development is running scarce. Slow economic growth in much of the developed world has eaten into governments’ discretionary funding, and the migrant crisis in Europe has diverted some commitments closer to home. Asia’s growing prosperity is also leading many donors to prefer Africa and other regions where they feel their aid dollars can have more of an impact. These pressures, coupled with Asia’s continued need to lift 330 million people above the...

Financing more infrastructure through the capital markets is a long-held ambition in Asia, where a trade surplus and infrastructure deficit has frustrated policymakers for years. Instead of channelling regional savings into US Treasuries, why not divert more of those resources towards lifting millions of people in Asia out of poverty? The ADB reckons Asia needs to invest US$1.5trn a year to meet the region’s infrastructure needs and maintain its current pace of growth, rising to US$1.7trn to respond to climate change. Mobilising private...

Socially responsible investment is catching on in Asia’s capital markets, opening new opportunities for global and local companies to broaden their funding sources. Green bonds have caught on fast in China and India, where public and private sector financiers have responded to government initiatives to tackle pollution and climate change. As well as banks refinancing their climate-aligned assets – the main source of Green bonds globally – corporate issuers in China have sold Green bonds for environmentally friendly cars, buildings, renewable...

Asia’s growing savings pool is emerging as a key pillar of the global capital markets. Global banks and corporate borrowers now regularly visit Singapore or Taiwan to court investors for their next long-term bond issue, and Chinese outflows have found a natural home in overseas financings that support mainland borrowers’ expansion plans. While there are questions over the sustainability of this new source of capital, Asia bulls argue that homegrown institutional investors will help protect the region against the next global shockwave. Chinese...

Fears of a hard landing for China’s economy are no longer investors’ biggest concern for Asia. Instead, they have given way to something potentially far more serious. A series of elections and referenda in Europe is making the European Union look increasingly fragile, following the UK’s shock decision to exit last year. Donald Trump’s new US administration is battling opposition to its policies on immigration and healthcare, questioning whether the President will be able to the deliver on his pro-growth promises. And geopolitical tensions are...

Little more than 12 months ago, China was in the headlines for all the wrong reasons. A sliding renminbi, tighter onshore liquidity and a disastrous attempt to control stock market volatility all fuelled talk of an impending crisis that would send its economy into reverse. China bears even triggered heavy selling on Wall Street in January 2016 – recognition, perhaps, of how important Chinese growth is to global GDP. The situation in 2017 is very different. China has just posted preliminary GDP figures showing a 6.9% annual expansion in the...

(Reuters) China will gather its friends and allies together for its biggest diplomatic event of the year in May, a summit on its New Silk Road plan, with most Asian leaders due to attend but only one from a G7 nation, the Italian prime minister. President Xi Jinping has championed what China formally calls the “One Belt, One Road”, or OBOR, initiative to build a new Silk Road linking Asia, Africa and Europe, a landmark programme to invest billions of dollars in infrastructure projects including railways, ports and power grids. China has...

India, at least by one metric, is the brightest spot in Asia. Its stock market is up 10.2% since the start of the year, as of April 19, edging past the Philippines as the region’s best performer of 2017. The BSE Sensex index closed at a record 29,974.24 on April 5, a 16% gain since late December. The rupee, too, has outperformed, strengthening through 64.5 to the dollar in April for the first time since August 2015. That is all the more impressive in a country that took 86% of its currency out of circulation in November, triggering a cash...

Japan’s capital markets have played an important role in Asian development ever since the ADB sold the world’s first Samurai bond in yen in 1970. Almost 50 years on, institutional investors in Tokyo and beyond are hungrier than ever for exposure to the growing region to make up for weak returns at home, but last year’s move into negative interest rates has clouded the picture. Borrowing at below 0% a year ought to appeal to much of developing Asia – not even a multilateral development bank can offer those kinds of terms. Currency swaps, however...