South-East Asia 2009
IFR Asia magazine issue 591 special report (March 21 2009)South-East Asia 2009
The current global financial crisis has tested the policies that Southeast Asian governments implemented after the Asian financial crisis little more than a decade ago. By and large, the region has weathered the new economic storms well, but the challenges ahead remain considerable.
Exports slump hurts Southeast Asia
Southeast Asia as a whole economic zone is expected post flat growth in 2009, hurt by plunging exports and weak consumption on the back of high inflation and rising unemployment, according to leading economists.
The flawed arena
Swap markets anchor fixed-income markets. They facilitate hedging, underpin primary public issuance via cross-currency and basis swaps and privately placed structured MTNs. However, Southeast Asian swap market development is patchy at best and much work remains to get them to the level of depth of the US and Europe or even more developed Asian markets like South Korea.
Sovereign funds drive flood of rights issuance
Funding support from still cashed-up Asian sovereign wealth funds is driving a wave of rights issuances emerging out of Southeast Asia.
The Philippines goes local
The Philippines is waking up to the power of its onshore bid, with both the sovereign and the country’s corporates detaching themselves from their traditional reliance on the offshore markets. And San Miguel recently proved with the Philippines’ biggest corporate peso deal that onshore liquidity can deliver in the size once thought only the G3 markets could deliver.
Government bond sales impact markets
When the government first imposed a windfall tax on independent power producers in July last year, the move was met with a huge uproar from the financial community. The industry was concerned that it would stifle the growing domestic bond market. By the time the levy was removed in September, the damage had already been done. And since then Malaysia’s bond market has never quite recovered to its levels of the first half of last year.
Regulating for Sharia
Indonesia may finally reach its true potential in the Islamic finance space, as a spate of regulatory improvements has been put in place to facilitate the market’s development.
Singapore braces for refinancing wave
The global economic crisis has claimed a clean sweep of the world’s economies and Singapore has been no exception, sinking into recession. However, the city state boasts of a resilient loan market thanks to plenty of refinancings, well capitalised local banks, active foreign lenders and supportive government measures.
Thailand feels the pinch
Thailand’s banks have so far weathered the global financial storm well, but its export-oriented economy looks set to feel the crunch from the global economic slowdown.
CapitaLand shows the rights way
As capital markets remain largely closed, Asian companies are increasingly turning to rights issues and private placements as equity raising instruments as Singapore’s CapitaLand Group has shown.