So far this year, southeast Asian issuers have raised just $8.6bn from in G3 currencies, or around 34% drop from the $13.1bn sold during the same time last year, according to Dealogic.
There are two more business days to make good the shortfall — even the most optimistic observer doesn't expect the final figures to be very different.
The volume decline is far from pretty, but it’s worth noting that southeast Asian volumes are in line with the rest of the region. Asia ex-Japan G3 bond volumes have also witnessed a similar 34% drop year-on-year until Tuesday.
But it is southeast Asia that merits a look beyond the headline volume, as the market has actually provided investors with plenty to bite into this year — pretty much every deal to come to market has received a solid response.
Part of the reason why southeast Asian trades have proved so popular is investors’ increasing need for geographical diversification away from China, given the country’s troubled economic outlook.
But southeast Asian issuers also deserve some kudos for rising to the challenge amid volatility, with names from Indonesia, Malaysia, Philippines, Singapore and Thailand all venturing into the G3 bond market this year.
It isn't just routine issuers doing routine refinancing, either. Several of the quarter's deals were landmarks in their own right, such as Singapore sovereign investment arm Temasek Holdings’ €1.1bn ($1.2bn) trade — its debut in euros — and Indonesia’s $2.5bn sukuk in March, the largest the sovereign has executed in Islamic format.
Thailand’s TMB Bank’s $300m bond from last week was also a rarity — it was the issuer’s first dollar trade since 2006. Orders for the transaction swelled to an impressive $1.8bn.
Some of the "missing" volume, too, is down to smart issuers, not weak markets. Take for example the Indonesian sovereign, which tends to execute a dollar bond at the start of each year. This time however, it prefunded $3.5bn of its 2016 borrowing in December to get ahead of a possible US rate hike — a savvy approach which won it plaudits from the market.
Outside the G3 currencies, the southeast Asian market is also developing nicely, with the Singapore dollar bond market, for example, cementing its place this year as a reliable source of funding for international issuers. Australia’s AusNet Services Holdings, Dutch lender ABN Amro, Japan’s Mizuho Bank and the US’s Ford Motor Credit have already tapped Singapore’s local market this year.
So much so that, international issuers have raised S$1.1bn ($802m) from selling Singapore dollar debt so far this year — far higher than the S$678m raised over the same period in 2015.
Southeast Asian issuers may only form a small part of the broader region’s issuance. But their portion is increasingly more prominent given the problems in China — whose issuers typically contribute a bulk of the deal flow.
It can be easy to jump to conclusions by looking at headline numbers but doing so would be a massive injustice to southeast Asia.
Slumping commodity prices and a strong dollar certainly haven't helped first quarter G3 bond volumes, but there’s far more going on behind the scenes.