South-East Asian Bonds Seek 8 Straight Year Record High

Southeast Asian companies are on track for an eighth straight year of record bond sales as local investors provide protection from a repeat of 1997, when the region’s currencies collapsed and global banks fled.

Bond sales will rise as much as 20 percent from last year’s $101 billion of local and dollar-denominated notes, according to CIMB Group Holdings Bhd. (CIMB), the top underwriter of domestic debt in the 10-member Association of Southeast Asian Nations, or Asean. DBS Group Holdings Ltd. and Maybank Kim Eng Holdings Ltd. see a repeat of last year’s 48 percent gain. PTT Global Chemical Pcl (PTTGC) of Thailand’s and PT Bank Rakyat Indonesia, the nation’s third-biggest lender, are lining up to sell debt.

The Thai baht is among the top five holdings in the Asia-Pacific Sovereign Open plan at Kokusai Asset Management Co., the manager of Japan’s largest mutual fund. Photographer: Brent Lewin/Bloomberg
Enlarge image Record Bond Sales Showing Lessons of 1997 Learned

Nomura Holdings Inc. and JPMorgan Chase & Co have set up new debt capital markets units to focus on Southeast Asia in the past five months. Photographer: Kiyoshi Ota/Bloomberg

The combination of higher yields, faster economic growth, and an expanding pool of wealthy investors is proving irresistible to the world’s biggest fund managers. New bond issues increased five-fold since 2000 as Asean governments transformed markets since the crisis 15 years ago, when tumbling currencies froze credit, forcing Thailand, Indonesia and South Korea to borrow more than $110 billion from the International Monetary Fund.


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Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu