Singapore bond market fastest-growing in emerging East Asia in Q3: ADB

EMERGING East Asia's local currency bond markets continue to expand with Singapore the fastest-growing in Q3, said the Asian Development Bank (ADB).

In its latest Asia Bond Monitor released on Tuesday, it noted cross-border bond issuances remained active, in particular China-based corporates selling debt in Hong Kong dollars and Singapore dollars. Issuances in US dollars also reached a record.

The ADB said while the region's bond markets are resilient, it warned that risks are rising. It cited "faster-than-expected US interest rate hike and a stronger dollar could pose problems for emerging East Asia's local currency bond markets given increased foreign holdings of Asia's bonds, which could easily reverse, and the record US dollar bond issuance by the region's companies".

Emerging East Asia comprises China, Hong Kong, Taiwan, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Emerging East Asia's local currency bond market continued to expand in Q3 2014, reaching US$8.2 trillion at end-September. Growth was relatively modest, with the market expanding 3.1 per cent quarter-on-quarter (q-o-q) in Q3 2014, the same pace as in the previous quarter, the ADB said.

The fastest-growing bond market in the region on a q-o-q basis was Singapore, with growth of 4.7 per cent and outstanding local currency bonds amounting to S$322 billion at end-September. Year-on-year growth was 6.1 per cent.