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The COVID-19 pandemic made 2020 a year of high market volatility, and APAC asset managers responded by allocating their investments to the fixed income space.
Emerging markets have grown rapidly over the past two decades, and sovereign and corporate borrowers are increasingly reliant on bond financing. There is also widespread concern over the state of emerging market bonds as central banks in major advanced economies start to unwind quantitative easing policies and raise interest rates.
Mutual funds, which are subject to outflow pressures, liquidated their bond holdings in the relatively risky emerging Asian bond markets, while insurance companies, annuities, and pension funds, which are not subject to outflow pressures, bought extra bonds in these markets. Mutual funds tended to invest more in relatively safe assets (developed Asia-Pacific local currency government bonds) and less in relatively risky assets (developed Asia-Pacific corporate bonds).
Such risk-averse global investors create huge outflows and market turmoil during recessionary periods. In order to mitigate the impact of such behavior of global asset managers on bond markets, policymakers in APAC are fostering a truly domestic and stable institutional investor base such as domestic pension funds and insurance companies, which could act as natural buyers of bonds when foreign investors sell and dampen market volatility during stresses in market conditions.
Scope of the Report
The scope of the report includes an understanding of the APAC fixed income assets management industry, regulatory environment, asset managers, and their business models, along with detailed market segmentation, product types, current market trends, changes in market dynamics, and growth opportunities. An in-depth analysis of the market size and forecasts for the various segments have also been provided.
|By Source of Funds|
|Pension Funds and Insurance Companies|
|Government/Sovereign Wealth Fund|
|Other Sources of Funds|
|Type of Asset Management Firms|
|Large Financial Institutions/Bulge Bracket Banks|
|Mutual Funds ETFs|
|Private Equity and Venture Capital|
|Fixed Income Funds|
|Managed Pension Funds|
|Other Asset Management Firms|
|Rest of APAC|
Key Market Trends
Corporate Bonds in Malaysia Driving the Market
Corporate bond issuance in emerging market economies increases when markets exhibit substantial liquidity. The Malaysian corporate bond market has grown dramatically over the last few decades. Corporate bonds outstanding as a proportion of GDP in Malaysia have increased steadily. As a percentage of GDP, the Malaysian corporate bond market is among the largest local currency bond markets in emerging market economies. Corporate sukuk, or Islamic bonds, have grown the most.
However, corporate bonds' liquidity has not progressed at a similar pace. Low liquidity appears to characterize both conventional and Islamic corporate bonds in Malaysia. Illiquidity may hamper access to local currency debt financing, so its measurement is an important topic for regulators and issuers.
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Emerging Market Economies in Asia-Pacific Witnessing Bond Yields
A rational investor would invest in a fund only if its expected return exceeds participation costs. As the expected return of a fund is often based on its past performance, mutual funds with higher participation costs can attract inflow only when they have a track record of outperforming returns. As the assets held by EME bond funds are generally low in liquidity, managers of these funds have adopted practices to pre-empt fire sales.
Australia also has a significant government and corporate bond market and is home to the largest financial futures and options exchange in the Asia-Pacific region. Also, despite the occasional wobble, China’s economic expansion has had a huge cumulative impact. An infographic on real returns from bonds in selected countries is presented below.
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The report includes an overview of asset managers operating across APAC or in one or a few countries across the region. The report provides detailed profiling of a few major companies, covering their product offerings, regulations governing them, headquarters, and financial performance. Currently, some of the major players dominating the market are listed below.
· In March 2022, Nomura announced plans to launch a new ETF designed to track the performance of the Solactive Japan ESG Core Index.
· In October 2021, Nomura announced that it had priced a Green Bond offering for NTT Finance Corporation. The offering consists of three-year, five-year, and 10-year tranches valued at JPY 300 billion in total, representing one of the world's largest single issuances of green bonds by a company.
Table of Contents
1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Insights into ESG Investing and Green Bonds
4.3 Technology Role in Client Relationship Management and in Way of Doing Business
4.4 Industry Policies and Government Regulations
4.5 Market Drivers
4.6 Market Restraints
4.7 Value Chain/Supply Chain Analysis
4.8 Porter's Five Forces Analysis
4.8.1 Threat of New Entrants
4.8.2 Bargaining Power of Buyers/Consumers
4.8.3 Bargaining Power of Suppliers
4.8.4 Threat of Substitute Products
4.8.5 Intensity of Competitive Rivalry
4.9 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
5.1 By Source of Funds
5.1.1 Pension Funds and Insurance Companies
5.1.2 Retail Investors
5.1.3 Institutional Investors
5.1.4 Government/Sovereign Wealth Fund
5.1.5 Other Sources of Funds
5.2 Type of Asset Management Firms
5.2.1 Large Financial Institutions/Bulge Bracket Banks
5.2.2 Mutual Funds ETFs
5.2.3 Private Equity and Venture Capital
5.2.4 Fixed Income Funds
5.2.5 Managed Pension Funds
5.2.6 Other Asset Management Firms
5.3 By Country
5.3.5 Hong Kong
5.3.6 South Korea
5.3.8 Rest of APAC
6. COMPETITIVE LANDSCAPE
*List Not Exhaustive
6.1 Market Competition Overview (Market Concentration and M&A Deals)
6.2 Company Profiles
6.2.1 Nomura Asset Management Co. Ltd
6.2.2 AEGON-Industrial Fund Management Co. Ltd
6.2.3 Fullgoal Fund Management Co. Ltd
6.2.4 Australian Super Pty Ltd
6.2.5 SBI Ltd
6.2.6 Kasikorn Asset Management Ltd
6.2.7 Invesco Great Wall Fund Management Co. Ltd
6.2.8 SCB Asset Management Co. Ltd
6.2.9 Vanguard Investments Australia Ltd
6.2.10 Harvest Fund Management Co. Ltd (China)*
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
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Frequently Asked Questions
What is the study period of this market?
The APAC Fixed Income Assets Management Industry market is studied from 2018 - 2027.
What is the growth rate of APAC Fixed Income Assets Management Industry?
The APAC Fixed Income Assets Management Industry is growing at a CAGR of 6% over the next 5 years.
Who are the key players in APAC Fixed Income Assets Management Industry?
Nomura Asset Management Co., Ltd., AEGON-Industrial Fund Management Co., Ltd., fullgoal fund management Co. Ltd, SBI Ltd, Australian Super Pty ltd are the major companies operating in APAC Fixed Income Assets Management Industry.