Connect with us

Banking

Corporate debt market in Thailand well positioned for further growth

Brazil, China, South Africa and Thailand are best-placed for corporate debt market growth says Moody’s Investors Service in a report that analyzed trends in 35 emerging markets.

Olivier Languepin

Published

on

Corporate debt markets in Brazil (Ba2 stable), China (A1 stable), South Africa (Baa3 negative) and Thailand (Baa1 positive) are best-placed to achieve further growth in the coming years, Moody’s Investors Service said today in a report that analyzed trends in 35 emerging markets.

·         Study of 35 EMs highlights the key factors for growth of domestic corporate bond markets

These four countries registered the biggest increase in the ratio of mutual funds and insurance investment portfolio assets to GDP between 2010 and 2016, improving their ability to withstand future financial shocks.

“The development of corporate bond markets provides companies with an alternative source of funding beyond bank lending. This can help to mitigate declines in real economic activity from credit disruptions associated with a banking crisis.”

Ruosha Li, a Moody’s AVP-Analyst and the report’s co-author

The level of industrialisation in an the economy tends to drive the development of capital markets and results in a need for more capital funding. Countries that are highly reliant on commodity exports often show less progress in industrialisation and are less likely to require as much access to corporate bond market for funding.

Thailand have the most developed domestic corporate bond market among emerging markets
Brazil, China, Malaysia, South Africa and Thailand have the most developed domestic corporate bond market among emerging markets

The report highlighted the three key factors that help to foster the growth of domestic corporate bond markets: firstly, an increase in the assets under management of domestic mutual funds. Secondly, the growth of insurance companies’ investment portfolios; and lastly, a reliable regulatory regime.

In some cases, the level of the country’s public debt, the size of its domestic equity market and the amount of bank lending to companies also have implications for corporate bond market growth.

Highlights of Thai Bond Market 2018

Total outstanding value of Thai bond market at the end of 2018 surpassed THB 13 trillion for the first time, rising 12% from last year.

Long term corporate bond issuance hit new record high for three consecutive years, reaching THB 879 billion.

Green bond was first issued in Thailand.

Non-resident investor holding of Thai bond reached new all-time high and touched trillion-level to THB 1.002 trillion in November 2018.

For the first time, since the early of the year 10-year Thai government bond yield has declined to stay below 10-year US Treasury yield until now.

The Securities and Exchange Commission of Thailand (SEC) amended regulations effective from April 2018 to tighten selling of bill of exchange (BE) to enhance investor protection

Comments

Asean

12 Things to Know about the ASEAN Catalytic Green Finance Facility (ACGF)

The ACGF is an ASEAN Infrastructure Fund initiative managed by ADB’s Southeast Asia Department Innovation Hub. It helps Southeast Asian governments prepare and finance infrastructure projects promoting environmental sustainability and contributing to climate change goals.

Asian Development Bank

Published

on

Southeast Asia faces an infrastructure investment shortfall of more than $100 billion a year, which may have worsened amid the COVID-19 pandemic.

Loading...
(more…)

Continue Reading

Banking

Thai cabinet approves 350 billion baht Aid for COVID-hit Businesses

Thailand unveiled new measures to help small and medium COVID-hit businesses in the tourism industry hit by a liquidity crunch.

Olivier Languepin

Published

on

The Thai cabinet has approved assistance worth 350 billion baht($11 Billion) to help businesses affected by COVID-19 with soft loans and asset warehousing.

Loading...
(more…)

Continue Reading

Banking

APAC Banks to Face Portfolio Valuation Losses As Yields Rise

The latest data suggest that Fitch-rated banks in Hong Kong, India, Indonesia, Malaysia and Taiwan have the largest AFS securities portfolios, and display particular sensitivity to changes in yields.

Avatar

Published

on

Fitch Ratings-Hong Kong/Singapore-21 March 2021: A rise in yields for long-dated sovereign bonds will result in near-term losses for Asia-Pacific (APAC) banks as they recognise valuation changes on their available-for-sale (AFS) bond portfolios, but the capital impact should be manageable for most rated banks, says Fitch Ratings.

Loading...
(more…)

Continue Reading

Most Viewed

Subscribe via Email

Enter your email address to subscribe and receive notifications of new posts by email.

Join 13,957 other subscribers

Latest

Trending