Why Asia’s Corporate Bond Market Is Growing * Asia’s corporate bond market has grown at a CAGR of 21% over the past three years and accounted for 46% of all large cap debt raised in 2012. The primary driver of this growth is capital markets disintermediating bank lending, which, in turn, reflects the reversal of Asia’s long period of excess saving. *
*Asian corporates are beginning to rely more on debt capital markets. *Last year large caps relied on bond markets, both foreign and local, for 46% of all debt raised and the trend is increasing. So far this year, USD bond issuance exceeds syndicated loan volumes for the first time ever. ** *For the growth of Asia’s corporate bond market, disintermediation is the key driver. *Since 2008 corporate Asia’s capex has grown by two-thirds and leverage increased by half – both meaningful increases – and yet the switch towards capital markets funding has contributed more towards bond market supply than these other factors combined. ** *The catalyst: Asia’s excess saving continues to shrink. *Asia’s long-standing current account surplus continues to shrink across the region, reflecting weaker exports and more domestic spending. ** *Banks, no longer the bastions of liquidity they were. *The decline in excess saving has resulted in tighter liquidity conditions for banks and the result has been tighter lending standards. Capital debt market conditions, by contrast, have been easier. ** *Any improvement in lending depends on a recovery in real demand growth. *For credit demand and spending to recover we need real growth to recover first, although liquidity conditions and loan standards have eased moderately. ** *We are raising our bond supply forecast. *We are assuming unchanged funding choices for the remainder of the year, although this is where the big potential delta is and we may be too conservative. We are still raising our supply forecast on the back of a higher projected corporate funding requirement. -- -- For Anything related with Stock market be Online at http://www.niftyviews.com/ Get free updates on your mobile phone. Sms "Join TSR " and send to 09223492234 FOR TRIAL STOCK/NIFTY/OPTION CALLS You received this message because you are subscribed to Google Group "STOCKRESEARCHER" group. To post to this group, send an email to [email protected] To unsubscribe email [email protected] for more info visit http://groups.google.com/group/STOCKRESEARCHER?hl=en-GB . This is Not a Spam Mail. Disclaimer :- "The opinions expressed by the members on this board are based on their individual experience and perceptions and to share information with other members with the best of intentions to help fellow members in investment decisions as equity investment is a risky venture." --- You received this message because you are subscribed to the Google Groups "TEAM STOCKRESEARCHERS" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/groups/opt_out.
