Asian bond survey: What’s driving the boom?
(19 May 2017 - Asia) As Asian issuers enjoy a record-breaking run, there could be no better time to ask the region’s investor base what is driving their investment spree.
Asia’s bond markets are in the midst of a breath-taking start to the year. Issuers in Asia ex-Japan have sold $138.9 billion of G3 bonds so far this year, a whopping 89% rise on the amount they sold during the same period in 2016, according to Dealogic.
But what is driving the huge boost in bond volumes? We decided to find out.
FinanceAsia teamed up with HSBC and S&P Global Ratings to commission our third survey of the region’s bond investor base. The poll, conducted by East & Partners between February and March, had responses from 177 global fixed income investors — and offered illuminating insights on the priorities of those investors flooding into Asia’s debt markets.
The news was undoubtedly positive. Some 81.4% of investors are planning to add exposure to Asian credit over the next 12 months, compared to 77% that were planning to do so six months ago, when the survey last took place.
China is, perhaps unsurprisingly, the market that generates the most excitement among the global investor base. Around 45% of investors said they were looking to increase their exposure to Chinese credits over the next 12 months, despite a steady rise in dollar issuance from the country and easier access to the domestic market for foreign investors.
But there was much more to the poll than a simple checklist of favoured countries. From investors' views on infrastructure bonds and their appetite for green issuance to their approach to unrated deals, the poll sought to identify the underlying drivers of what looks set to be a record year for Asia’s bond market.
For an analysis of the results, the raw data, and a database of responses to previous surveys, please click here.