2017 has opened with a bang in the Asia-Pacific debt markets, fuelled by a perfect storm of influences. It might not last, but bankers are enjoying it while it does.
Over the course of two weeks in January, issuers flocked to the market like animals heading for a soon-departing ark. And the flood they were trying to get ahead of? Take your pick from a Trump presidency, hard Brexit, rising rates or the French and German elections.
They came in every shape and size: sovereign benchmarks from Korea and the Philippines, high-yield deals from Indonesia, a rare glut of investment-grade transactions out of India, and paper of every variety from the quasi-sovereign to the unrated out of China.
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Clifford Lee, DBS |
“I thought that with all the uncertainty in the world globally the bond market would have a more cautious start,” says Clifford Lee, head of debt capital markets (DCM) at DBS. “Yet deals are flowing into the market, they have done well, and many have traded up. It seems to contradict the initial macro read.
“From where I’m sitting, I’m relieved to see that.”
