Asia ex-Japan: Bond issuance expectations vary
across the region. Among the major issuers, we
expect net issuance to decline in Korea and the
Philippines, remain roughly stable in Malaysia and
Indonesia, and increase in India, Taiwan and Thailand.
􀂃 CEEMEA: Net domestic bond issuance forecasts for
2012 diverge in CEEMEA as well. Issuance should
decline sharply in Czech Republic and slightly in
Poland, remain unchanged in Hungary and South
Africa and increase in Turkey and Russia. Some
issuers such as Poland (external) and South Africa
(domestic) have opted to draw on their cash reserves
rather than increase issuance.
In all countries however, we think that issuance
forecasts will likely be challenged if growth turns out
to be lower than government projections. Most bond
markets have had a good start in 2012, but we think
that a sustainable rally will require a durable
improvement in euro-zone sovereign and funding
markets, and in some cases, the return of
international investors.
􀂃 LatAm: Expectations of net domestic bond issuance
are fairly similar in both Mexico and Brazil. Both
countries are seeking to increase the maturity profile
of their debt, emphasizing the issuance of longer-term
fixed and interest-rate-linked securities.
Issuance in Brazil should be flat to 2011 (specific
guidance has not yet been given); however, Mexico’s
2012 plan outlines a slight increase in borrowing by
MXN40bn. We expect that pension growth in the
region should continue to provide demand for local
debt but see upwards pressure on issuance guidance
if growth and commodity exports slow.