Key corporate and finance trends in Asia-Pacific during 2023
Learn about the trends and developments in the corporate and finance market the Chambers Asia-Pacific team discovered during the research into the 2024 guide.
Rapid development in the digital lending and payments space
India has seen an expansion in its digital lending and payments space, with firms being asked to advise on setups, financing documents and compliance with India’s current guidelines. An emerging area we are seeing more broadly is digital assets.
In Japan, there has been an increase in securitization and real estate Securities Token Offerings. In Thailand, PTT Public Company was the first to issue bonds under the government’s Digital Infrastructure web portal. However, many consider it early days, and there are concerns over the ability of governments to keep up, particularly in areas with fast-moving tech, like AI. Hong Kong has already increased its regulations for virtual assets, and we expect other countries to follow if they haven’t already.
The growing significance of private credit in the market
With market uncertainty and high interests slowing the debt markets down, there have been few high-yield issuances. As these interviewees highlight, this has led to the emergence of private credit to bridge the gap. Private credit is expected to double over the next year with firms such as Blackstone, Apollo, KKR and Softbank entering into this market.
“There has been an emergence of private credit funds looking to step into the banks shoes. Especially as interest rates rose, increasing yields which make it more attractive for these private companies.”
“High yield has been virtually non-existent, but that has led to some interesting innovations and changes in market structure. There is a lot more emphasis on rated deals and investment grades. Part of that has been the emergence of private credit as private credit funds came in and bridged the gap.”
“There has been a massive growth of private credit providers replacing traditional banks.”
In conjunction with the rise of private credit, is the increase of structured debt and liability management exercises which have been used to mitigate investor risk and as a way to control rising or fluctuating interest rates, particularly in Singapore and Hong Kong.
“Liability management will still be relevant for issuers, either as a form of exercise or to restructure or consent from shareholders for a waiver.”
In India, this has led to increased pressure on its domestic bond market. India is said to be at the start of a capital expenditure cycle which is seeing debt being raised and should lead to more investment into its energy, infrastructure and manufacturing industries.
