Demand for Korean bonds rising strongly in 2024: JP Morgan

In powerful markets for Asian traders, Korea’s bond market has been rising strongly in 2024 and taking on a big portion of the issuance.  

“Korea’s bond market is rising strongly this yr and has taken up 33% of the bond market in Asia, partly as a result of the pricing differential between onshore and offshore shouldn’t be vital and issuers need to diversify funding sources as at instances onshore liquidity could be tight,” mentioned Madhur Agarwal, head of Debt Capital Markets (DCM) prigination Asia ex. Japan, JP Morgan, talking at a press convention in Hong Kong in June.

General the financial institution expects the bond market to complete at round $125 billion in 2024 for Asia ex. Japan, because the Chinese language market progressively opens up and India continues to construct momentum. 

Agarwal, based mostly in Hong Kong, added: “Whereas initially of the yr we (JP Morgan’s economists) have been anticipating 5 fee cuts in 2024, we are actually anticipating one fee lower in November. Buyers are sitting on money and first provide is being oversubscribed.”

The financial institution can be anticipating personal credit score to proceed to develop in Asia, whereas sustainability bonds in Southeast Asia (SEA) are additionally set to turn out to be extra common. General, the inexperienced Finance bond area is growing in Asia and rising extra sophistacated. Ex Japan, Korean, mainland Chinese language, Hong Kong and Indian issuers are essentially the most energetic within the area. 

Puja Shah, head of SEA DCM and sustainable Finance Asia ex. Japan, JP Morgan, mentioned: “The renewables market is constant to develop in Asia, with sovereigns and monetary establishments teams (FIGs) main the best way in issuance.”

Singapore-based Shah added: “We’re additionally seeing demand develop in SEA  for sustainability bonds. The general market in Asia, ex Japan, can be much like 2023 in 2024.”

Shah was talking on the similar occasion in Hong Kong. 

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