It used to be the syndicate manager's most blatant lie: "The bonds were placed mainly with accounts in Asia ex-Japan." That, everyone knew, meant that the lead manager still owned most of the bonds.
How times have changed. Nowadays, institutions in Asia do very often buy up a large chunk of new issues. Goldman Sachs, for example, estimates that about one-third of the global bonds and jumbo Eurobonds in deals it lead-managed last year were placed in non-Japan Asia (and about another 15% in Japan). "A couple of years ago, Asian investors were important," says Kipp Nelson, a managing director at Goldman Sachs in Hong Kong. "But now these investors often drive deals."
The reason for the rise of Asian investors is easy to explain. It is mostly due to rapid build-up of reserves by the region's central banks (see chart). The foreign exchange reserves of the 11 biggest central banks in Asia have grown from $324.92 billion in 1992 to $678.05 billion at the end of last year.
The growth in China's reserves has been particularly spectacular: they have multiplied by more than four times in as many years to over $100 billion.