ADB’s latest quarterly Asia Bond Monitor shows that as of the end of June, there were $7.9 trillion in outstanding bondsing emerging East Asia, 2.5% more than at the end of March and 9.3% more than at the end of June 2013.Local currency bond issuance totaled $1.1 trillion in the second quarter, up from $852 billion in the first quarter. Meanwhile, sales of bonds denominated in US dollars, euros, or yen in January through July was $121.4 billion, suggesting the region will set another record for annual issuance.Emerging East Asia comprises the PRC; Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; Philippines; Singapore; Thailand; and Viet Nam.Viet Nam was the fastest growing local currency bond market, both on a quarterly and an annual basis. However, the PRC remains the largest market in Asia after Japan, with $4.9 trillion in outstanding bonds. That marked a 3.4% on-quarter rise and a 10.8% annual rise, largely due to the increase in outstanding policy bank bonds and local corporate bonds.In the PRC, a slowing of the property market is a concern because most collateralized borrowing is secured against property. A drop in property-related revenue could make it more difficult for local government to service their bonds. Property companies have also become increasingly prevalent bond issuers themselves.
Asia's Bonds Face Rising Risks from US Rates, Mid-East Tensions, PRC Property
ADB’s latest quarterly Asia Bond Monitor shows that as of the end of June, there were $7.9 trillion in outstanding bondsing emerging East Asia, 2.5% more than at the end of March and 9.3% more than at the end of June 2013.Local currency bond issuance totaled $1.1 trillion in the second quarter, up from $852 billion in the first quarter. Meanwhile, sales of bonds denominated in US dollars, euros, or yen in January through July was $121.4 billion, suggesting the region will set another record for annual issuance.Emerging East Asia comprises the PRC; Hong Kong, China; Indonesia; the Republic of Korea; Malaysia; Philippines; Singapore; Thailand; and Viet Nam.Viet Nam was the fastest growing local currency bond market, both on a quarterly and an annual basis. However, the PRC remains the largest market in Asia after Japan, with $4.9 trillion in outstanding bonds. That marked a 3.4% on-quarter rise and a 10.8% annual rise, largely due to the increase in outstanding policy bank bonds and local corporate bonds.In the PRC, a slowing of the property market is a concern because most collateralized borrowing is secured against property. A drop in property-related revenue could make it more difficult for local government to service their bonds. Property companies have also become increasingly prevalent bond issuers themselves.
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