Local currency bond market nears US$100 billion

In the second quarter of 2022, the local currency bond market grew by 8.1 per cent from the previous quarter to US$99.5 billion. 

Government bonds increased by 7.4 percent compared to the previous quarter to US$69.8 billion, mainly thanks to the increase in state bank bills. 

Meanwhile, corporate bonds rose 9.5 percent quarter-on-quarter to US$30 billion, thanks to a surge in issuance in the first months of the year.

Notably, the bond market across Asia also witnessed a record high issuance in the second quarter. This was mainly due to China's efforts to stimulate the economy.

Bond issuance in the Association of Southeast Asian Nations (ASEAN) economies increased by 10.3 percent, which raised the bloc's share of regional bond issuance to 17.5 percent.

Issuance of government bonds spiked at 25.9 percent from the previous quarter, as governments took on debt to support the economic recovery. Total outstanding government bonds reached US$14.5 trillion.

Corporate bond issuance fell 4.9 percent amid a weakening economic outlook and rising borrowing costs, bringing the total amount of corporate bonds to US$8.4 trillion.

The size of the sustainable bond market in the ASEAN region along with China; Hong Kong (China); Japan, and the Republic of Korea grew modestly amid lower overall investment demand, reaching US$503.5 billion.

Also according to the report, long-term bond yields in Emerging East Asia (China; Hong Kong, China; Indonesia; Korea; Malaysia; Philippines; Singapore; Thailand and Viet Nam) have declined in the period from June 15 to August 24 amid heightened risks and a gloomy economic outlook, even as financial conditions have eased somewhat./.