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Thursday, 21 February 2019

Upfront

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  • Credit caution

    The rebound in Asia’s bond markets may be short-lived. On the surface, a run of successful new issues and popular placements from the high-yield and emerging-market sectors is a sign that risk appetite is back with a vengeance. Dig a little deeper, however, and the disappointment of late 2018 is far from a distant memory.

  • As you were

    The definition of insanity is doing the same thing over and over and expecting different results. Australia’s policymakers might want to keep Einstein’s apocryphal quote in mind when weighing up the proper response to the Royal Commission inquiry into financial misconduct.

  • New Year celebrations

    This week’s Lunar New Year will usher in the year of the pig, a symbol of prosperity and optimism in Chinese mythology. After a lean year for the country’s equity markets, the latest round of reforms should help bring home the bacon.

  • Capital confusion

    The Chinese authorities’ decision to broaden the investor base for onshore bank capital notes has had an immediate effect in boosting demand for such securities, but it will not do much to convince anyone that China will ever allow banks to fail.

  • Project mayhem

    Where in the world can a road builder default on a US$600,000 debt payment when it has more than US$31m locked away in an escrow account specifically designed to service its debt?

  • Grande soap opera

    Has China Evergrande finally figured out the Asian high-yield market? The last time the debt-laden Chinese developer sold a big US dollar bond, its existing curve took a 10-point hit. Back in 2017, the new issue slumped five points on the break. Last week, by contrast, it priced a US$3bn tap with little drama.

  • IPO innovation

    China’s forthcoming technology board is likely to be of more interest to Ant Financial than Alibaba.

  • A la Modi

    India made the right moves for its capital markets last week, but probably not for the right reasons.

  • Early silver lining

    The Asian G3 bond market has got off to a surprisingly strong start, but it would be wrong to assume this means sentiment is going to rebound simply because people think things cannot get any worse than last year.

  • Back in the game

    Talk of the death of Chinese acquisition financing has been, to coin a phrase, greatly exaggerated. The first leg of a €4.2bn (US$4.8bn) debt package for Anta Sports Products hit syndication last week, and it is already clear that market participants have both the means and motive to pursue more deals.

  • IPO interference

    Asia’s equity underwriters are caught between a rock and a hard place. After a dismal end to 2018, the pressure is on to reopen markets. The right approach, however, seems to be open to debate.

  • Coming of age

    Asia’s bond markets are heading for a testing time. After years of breakneck growth, a volatile start to 2019 inevitably raises questions over the sustainability of the region’s debt capital markets.

  • Time for TLAC

    China’s introduction of loss-absorbing bank debt has the potential to be an enormous headache for bond market regulators. In fact, though, they should view it as an opportunity to improve the market and strengthen the system.

  • So long, 2018

    Asia’s capital markets are marking the end of 2018 with more of a whimper than a bang. Stocks are having a tough time recovering from October’s lows, and credit spreads are back at two-year highs.

  • London Disconnect

    Did Brexit just derail the Shanghai-London Stock Connect link?

  • Praising Jakarta

    Well done, Indonesia. The stand-out deal of the last week in Asia’s capital markets came from – of all places – the Indonesian government.

  • Perpetual trouble

    It is an open secret in the capital markets that perpetual bonds do not, in fact, last forever. That message, however, has yet to make it to China’s ruling classes.

  • Done deal

    Institutional investors can move on. SoftBank Corp’s record IPO is practically a done deal, even before bookbuilding begins.

  • London landmarks

    The introduction of the Shanghai-London stock trading link has enormous political significance for the governments at each end of the connection. In capital markets terms, however, its success will boil down to two things: price, and liquidity.

  • A better Masala recipe

    Masala bonds are finally back on the menu for Indian companies after an eight-month diet, but bankers and issuers should not be expecting a feast.

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