Capital markets, China, India, Japan, Regional Asia - Sunday, February 1, 2009 14:07 - 0 Comments

Asian bonds at a crossroads

Institutional Investor, February 2009

Asia’s bond markets enter 2009 at a crossroads. Last year many of them demonstrated that they were credible alternatives to credit-clogged G3-currency markets, at least for local borrowers. But  what happens next? The coming 12 months will demonstrate whether Asian markets have shown sufficient depth and maturity to hold their ground as a key funding source or will once again be only an afterthought to the major global currencies.

“Local currency markets are a lot more important than people give them credit for,” says Sean Henderson, head of debt syndicate for Asia Pacific at HSBC. Dealogic, the data provider, says bonds in the 10 main Asia ex-Japan currencies combined amounted to the equivalent of US$231.8 billion in 2008, compared to US$28.3 billion for Asian issuers in dollars, yen and euros combined. “Both in terms of scale and the trajectory of the markets, local currency became a lot more important in 2008,” Henderson says. In particular, Asia proved itself a rare location in which borrowers could raise bank capital: Maybank, UOB, DBS and OCBC all raised tier one capital locally in 2008, and several Philippine lenders raised tier two funding. Continue…

Popularity: 1% [?]