Asean bond market growth to accelerate
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The Asean bond market, now with over US$1 trillion of domestic bonds, is expected to witness continued growth rate, with growth beyond the 11-12 per cent achieved over the last five years, said Moody's Investors Service.
"Given the strong GDP growth rates in the region, increased disintermediation, high infrastructure financing needs, cross-border expansion and the implementation of Basel III rules, Asean's bond market growth will likely accelerate beyond the 11 per cent-12 per cent achieved over the last five years," said its head of the Asia Pacific region, Min Ye.
At the end of 2013, outstanding bonds were tuned at over $1 trillion. Cross-border bonds were worth $178 billion.
The more than $1 trillion outstanding covers only six Asean countries, namely, Singapore, the Philippines, Malaysia, Indonesia, Vietnam and Thailand. In addition, the amount represents almost half or 46 per cent of GDP in the six Asean economies.
Ye pointed out that Asean and China are the only two areas in Asia with significant bond market growth.
Ye says China's domestic bond market grew at a rate of 15 per cent over the last five years, while growth for cross-border bonds in China averaged 39 per cent over the same period.
As for corporate bonds, Ye says the size of Asean's cross-border corporate bond market - which totaled $108 billion in 2013 - is similar to that of China's $133 billion for the same year. Both have also experienced strong issuance growth in recent years, with Asean recording a compound annual growth rate of 34 per cent during 2009-13 and China recording 111 per cent over the same five-year period.
