Asia Bond Monitor - Summer 2010 | Asian Development Bank

Asia Bond Monitor - Summer 2010

Publication | July 2010
Asia Bond Monitor - Summer 2010

The Asia Bond Monitor reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. This issue reports bond market developments in the first quarter of 2010.

This publication reviews recent developments in East Asian local currency bond markets along with the outlook, risks, and policy options. It covers the 10 members of the Association of Southeast Asian Nations plus the People's Republic of China; Hong Kong, China; and the Republic of Korea.

This issue focuses on the bond market developments in the first quarter of 2010. It also provides the countries' recent policy and regulatory developments.

Here are the highlights:

  • The total amount of bonds outstanding in emerging East Asia’s local currency (LCY) market at the end of 1Q10 rose to USD4.6 trillion, a year-on-year (y-o-y) increase of 17.1%.
  • LCY bond issuance in emerging East Asia in 1Q10 totaled USD1.07 trillion, an 80.1% y-o-y increase over issuance in 1Q09.
  • The bills-to-bonds ratio for most emerging East Asian markets rose in 1Q10 from 4Q09, mainly due to a rise in the ratio of central bank bills to bonds.
  • Yield curves on LCY government bonds in emerging East Asia have generally flattened since the end of 2009.
  • Foreign investors’ holdings in the region’s bond markets are rising.
  • Foreign currency (FCY) bonds outstanding in emerging East Asia at the end of 1Q10 totaled USD268 billion, a 6.7% increase over 4Q09.
  • Returns on LCY government bonds for most markets have declined since the end of 2009, reflecting the flight-to-safety behavior of investors.