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Asia corporate bonds grow in 2012
12 March 2013
Despite increased demand for equities and some weak recent issuances, investors still have an appetite for Asian corporate bonds, finds Paul Golden
Asian corporate bonds – especially those denominated in dollars, euros or yen – enjoyed a record-breaking 2012, with issuance exceeding $100bn for the first time according to figures from Standard & Poors. Much of this growth was driven by financial companies, whose issuance doubled from $30bn in 2011 to $60bn last year.
The start of 2013 has been less promising, with Bloomberg reporting that nearly four in five of the dollar bonds sold in January by Asian companies losing money by the end of the month. Over the same period, Asian equity flows have increased sharply (see graph 1).
But the discernible swing towards equities does not mean that investors have lost faith in corporate bonds, even if the record levels of Asian US dollar bond supply was coupled with a few poorly structured deals and US treasury volatility have eroded some of the positive sentiment. That is the view of Nikko Asset...
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