Citi Issues Guide to Asian Bond Market Developments

Hong Kong – Citi has released the new market guide Market Infrastructure Developments Impacting Asian Bond Markets to help industry participants navigate the rapidly changing Asian fixed income landscape.

With an increasingly diverse community of active issuers and investor participants, the Asian bond markets are expanding rapidly and are expected to remain strong throughout the year.

As a global top tier custody and clearing provider, Citi offers unique insights to help clients establish an efficient and scalable process to access the rapidly developing Asia Pacific bond markets. Citi has on the ground presence in over 95 markets and the world’s largest proprietary custody network in over 60 markets, with direct custody services across 17 markets in Asia Pacific for bonds as well as equities on clearing and settlement.

“We have compiled a summary of key market infrastructure changes impacting bonds, along with a high level snapshot of the size and trading, clearing and settlement infrastructures on a country by country level within the Asia Pacific Region,” said David Russell, Regional Head, Asia Pacific for Citi Securities and Fund Services.

“This guide highlights developments in Hong Kong and China, Islamic bonds, and the Pan-Asian CSD Alliance to help keep industry participants abreast of these developments in the Asia Pacific region.”

The robust fundamentals of Asian economies and corporates provide fixed income investors with attractive yields when compared with bonds in developed markets. Persistently strong demand from insurers, central banks and sovereign wealth funds indicates that Asian bonds will remain an important part of a diversified investment portfolio and that the regional market will extend last year’s pace of record issuance.

“This guide helps to further promote issuance and facilitate demand of local currency denominated bonds and support the development of related infrastructure for the bond markets,” said Russell.

Key developments discussed in the market guide include:

  • The Association of Southeast Asian Nations (ASEAN), together with China, Japan and Korea, have established the ASEAN +3 Bond Market Forum (ABMF) to standardize market practices and regulations relating to cross-border transactions.
  • Hong Kong’s local currency bond market has grown to USD178 billion, with issuers diversifying from sovereigns and mainland banks to multinational companies and international financial institutions.
  • The China Securities Regulatory Commission is allowing more international investors to buy bonds on the nation’s largest debt market, the Interbank RMB Bond Market.
  • Hong Kong remains as issuers’ country of choice for dim sum bond issuance, with the largest pool of RMB liquidity outside of China.
  • Japan’s revenue bonds are included in the Japanese Bond Income Exemption Scheme (J-BIEM), allowing non-residents tax exemption on interest arising from profit-linked bonds.
  • Regulators in India have increased the limit for Foreign Institutional Investors (FIIs) to invest in government securities and corporate bonds, and relaxed restrictions around lock-ins and maturity requirements to invest in these instruments. Foreign investors accessing India through the Qualified Foreign Investor (QFI) route have been permitted to invest in corporate debt securities (without any lock-in or residual maturity clause) and mutual fund debt schemes subject to a total overall ceiling of USD1 billion.
  • Singaporean regulators have taken steps to broaden and deepen their corporate bond market and have extended the schemes that provide withholding tax exemption for non-residential beneficial owners.
  • Bursa Malaysia has launched the first retail exchange-traded bonds/sukuk (ETBS) and continues to be the hub for Islamic financial services, while other markets in the region have increasing demand for Islamic bonds and there are signs of consistent future growth.

Securities and Fund Services provides customized solutions that support the diverse investment and transaction strategies of investors, issuers and intermediaries worldwide. Offering a suite of investment administration, portfolio and fund services, trust and custody and investment and financing solutions, we help our clients meet the challenges of issuing, managing and distributing financial products and services in today’s complex and competitive marketplace. We offer direct access to more global markets through our unmatched proprietary custody and banking network, delivering the access, intelligence and insight our clients need to help meet their day-to-day needs and pursue their strategic objectives.




The Citi “Market Infrastructure Developments Impacting Asian Bond Markets” is a summary of key market infrastructure changes impacting bonds, along with a high level snapshot of the size and trading, clearing and settlement infrastructures on a country by country level within the Asia Pacific region. Citi has been actively monitoring market developments in the region and contributing to discussions with regulators and market participants, to assist the market infrastructures in many of the developments.

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