Background:

At MarketAxess, I launched a marketing campaign to promote a report on the Asian international bond markets by the International Capital Markets Association that leverages data contributed by MarketAxess. I developed a blog article and promotional kit for this campaign.

Format: 

Blog article, email copy, social copy, ad copy

Published April 2023  here

Navigating the Asian bond markets: a report by ICMA

The International Capital Market Association (ICMA) released its latest edition of the Asian International Bond Markets report, and MarketAxess is proud to be a contributor for the third consecutive year. This report leverages our TraX data to provide global market stakeholders with an updated overview and analysis of secondary market trends in the region through 2022. 

2022 proved to be a challenging year for the Asian international bond market. Issuances took a dip while interest rates and geopolitical tensions rose. The data gathered by ICMA suggests that reduced liquidity, as seen in lower secondary market volumes, is in part a response to higher yields and widening credit spreads, which increase uncertainty for investors and risks for market-makers. This can also be attributed to a reduction in primary market activity.  

Despite the unfavorable factors affecting the bond markets in Asia though, there have been increasing appetite towards innovative technologies and promoting digitalization in the Asia bond markets, with the use of electronic venues to transact in the secondary market becoming increasingly entrenched. 

Report highlights

• 2022 issuances: The Asian international bond market saw total issuances drop by 44% in 2022 compared to 2021, primarily due to rising interest rates, geopolitical conflicts, and credit events in the Chinese real estate sector. TraX data from MarketAxess supports this observation across secondary markets too, with trade volumes and counts significantly lower since April 2022, and further declining in the final quarter.

• Chinese issuers: Despite a 49% YoY decline in issuance from Chinese issuers, they remained the largest source of international issuance, accounting for 33% of the total deals followed by Japan and South Korea.

• The secondary market: The secondary market experienced a decrease in traded volumes and trade counts, particularly in the second half of the year according to our TraX data. Key drivers were rising USD, higher uncertainty, reduced primary activity, geopolitical tension, and the collapse of the China property market. This is also why, particularly in time of high volatility, participants noted that the number of active liquidity providers decreased through the year. Meanwhile, the use of electronic venues to transact in the secondary market continues to increase, with trading protocols, such as all-to-all RFQs, automation and portfolio trading, slowly gaining traction in Asia.

Despite the setback, the view that the US may be reaching the peak of the interest rate cycle, stabilizing macro-economic outlook, a sense of recovery in the Chinese property sector, and China’s post-Covid economic reopening are inciting optimism about the prospects of both primary and secondary markets in 2023.

Read the report (English)   |   Read the report (Chinese)