Asia Bond Monitor – November 2014

Publication | November 2014
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The Asia Bond Monitor reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. This includes a special section on the AsianBondsOnline Bond Market Liquidity Survey.

Price
  • US$22.00 (hardcopy)

Bond Market Outlook

Emerging East Asia’s bond markets remained relatively unaffected as global financial market turmoil impacted other emerging markets in the third quarter of 2014. Emerging East Asian 10-year bond yields generally exhibited a downward trend between July and October. Most of the region’s currencies weakened against the US dollar between July and October.

The risks to the region’s local currency (LCY) bond markets are increasing, these include:

  • Tightening liquidity in the region’s corporate bond market
  • A weaker property market in the People’s Republic of China (PRC) that might limit the ability of some property companies to service debt obligations
  • An earlier than expected rate hike in the US that could raise borrowing costs and lead to further appreciation of the US dollar.

Special Section: AsianBondsOnline Bond Market Liquidity Survey

LCY bond markets in emerging East Asia remained resilient, with most market participants noting improving liquidity conditions in 2014 compared with 2013. This finding was validated by quantitative survey results as average bid–ask spreads for both government and corporate bond markets were lower this year compared with the previous year’s survey. At the same time, liquidity in corporate bond markets continued to lag government markets.

Market participants identified greater investor diversity as the most important structural issue as it relates to deepening liquidity in both government and corporate bond markets. The relative importance of greater diversity of the investor profile vis-à-vis other structural issues appears to be driven by the presence of a few investor groups that continue to dominate emerging East Asia’s LCY government bond markets.

Contents

  • Highlights
  • Global and Regional Market Developments
  • Bond Market Developments in the Third Quarter of 2014
  • Policy and Regulatory Developments
  • AsianBondsOnline Annual Bond Market Liquidity Survey
  • Market Summaries

Additional Details

Type
Series
Subjects
  • Economics
  • Finance sector development
  • Finance sector reform
  • Financial markets and institutions
Countries/Economies
  • Brunei Darussalam
  • Cambodia
  • China, People's Republic of
  • Hong Kong, China
  • Indonesia
  • Korea, Republic of
  • Lao People's Democratic Republic
  • Malaysia
  • Myanmar
  • Philippines
  • Singapore
  • Thailand
  • Viet Nam
SKU
  • RPS146979-2
ISBN
  • 978-92-9254-797-4 (print)
  • 978-92-9254-798-1 (electronic)
ISSN
  • 2219-1518 (print)
  • 2219-1526 (electronic)

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