Asia Pacific bond value expected to hit record next year

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KUALA LUMPUR, Sept 30 The total value of bonds to be issued in the Asia-Pacific excluding Japan next year is expected to hit another record, fuelled by the existing momentum from China, said Barclays Investment Banking Director Hui Yik Seong.

“China is in need of refinancing as companies embark on cross-border mergers and acquisitions.

“The country is expected to be the major contributor to the rosy outlook in 2015,” Hui said, estimating that China currently takes up half of the total issuance size in the region.

The demand for Indian bonds post-election is also picking up with issuances in Singapore and Indonesia in the pipeline, and all this will bode well for the rosy outlook next year, he said.

Hui was one of the speakers at the “Asean Fixed Income Summit” hosted by Bank Negara Malaysia here on Monday.

According to Hui, the total value of bonds issued is expected to hit US$30 billion for the fourth quarter this year, while the first three quarters had gathered US$140-US$150 billion.

Last year’s amount was in the range of US$140-US$150 billion, he said.

Meanwhile, another speaker, Aberdeen Asset Management Asia Ltd Senior Investment Manager Kenneth Akintewe, said the current global economic environment is perfect for the Asia bond market.

He said this was on the back of the recovery in the US economy, Asia as the world’s manufacturing hub and with China moving up the value chain.

For Malaysia, Akintewe said the large foreign participation in the local bond market gives it a positive outlook as it translates into a long-term structured position.

At present, about 40 per cent of Malaysia’s bond market is owned by foreigners.