Global Head, Capital Markets,
The time is now
We see the continued deepening of local currency bond markets driven by increased investor demand for exposure to local markets, especially in the emerging markets. Local currency denominated debt from the top eight emerging markets by size has grown steadily from 10% of global issuances in 2013 to 16% in 2016 (Bloomberg). The debt to GDP ratios of many emerging markets are also at levels significantly lower than those of the developed markets, which indicates room for expansion. China’s ratio, for example, is about 16%, while that of developed countries like the US and Germany hover around 70-75%.
Add to that, many Asian local currencies have been outperforming the US dollar in recent times, which provides further upside to investors that take a longer view of local currency bonds. The potential here is immense and should remain a market to watch.
About the Author
Henrik Raber is the Global Head of Capital Markets at Standard Chartered Bank. He joined the Bank in July 2009 as Regional Head of Capital Markets for Europe, Africa and Americas, and took on the role of Global Head of Debt Capital Markets in March 2010 before assuming his current role in mid-August 2014. Prior to Standard Chartered, Mr Raber was with UBS Investment Bank, where he headed European Credit Flow Sales and Trading, which encompassed Investment Grade, High Yield and Loans. Before working at UBS, Mr Raber was with Lehman Brothers for eight years in Fixed Income credit trading and capital markets.
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