One of the clearest lessons of the Asian financial crisis has been the danger of companies relying on poorly supervised and ill-run banks as their sole source of funding. Diversifying capital sources by building up local securities markets is a standard prescription for Asia handed down from international bodies such as the IMF and market practitioners everywhere. This year, such debt markets have been taking off, notably in Indonesia, Korea, Malaysia, the Philippines, Singapore and Thailand to complement the already established Hong Kong dollar market.
There are clear advantages for local investors and corporate risk managers in developing such local sources of funding. Earlier this year, HSBC Markets led a M$500 million (US$132 million) eight-year fixed rate bond for Malaysian energy company Tenaga. "Previously, Tenaga, which has 100% of its revenues in ringitt, had all of its debt liabilities in foreign currency," says Mark Bucknall, global head of debt capital...
