February 19, 2009 by baltia
By Andrew Wood in Hong Kong
Published: February 18 2009 00:52 | Last updated: February 18 2009 00:52
Indonesia and South Korea may be some of the few Asian securitisation markets outside of Japan to show any life in 2009, as demand for fresh asset-backed and mortgage-backed securities, which dried up last year, shows little sign of reviving, according to Moody’s, the ratings agency.
“The trends that echoed through all Asian securitisation markets in 2008 – the lack of investor interest and widening spreads – are expected to continue into 2009,” said Moody’s special report Asian Structured Finance: Asian Markets Slowing and Continue to be Affected by Global Volatility, published on Tuesday. The report covers South Korea, Singapore, India, China, Taiwan, Indonesia, Hong Kong, Thailand and Malaysia.
EDITOR’S CHOICE
China equities strength revives decouple talk - Feb-16Asian shares rise on bailout confidence - Feb-13Bleak times for the funds of hedge funds - Feb-08A and H shares near parity - Jan-06Beijing boost for foreign banks - Jan-08Optimism in face of gloom - Dec-21South Korea remained the largest market in Asia outside of Japan with $3bn of international structured finance issuance in 2008, based mainly on credit cards, and car and home loans. Demand was strong in the first three quarters of the year but investors lost interest as the credit crisis deepened following the collapse of Lehman Brothers in September.
Moody’s expects consumer asset securitisations sponsored by quasi-government entities to increase in South Korea. Banks, it says, are showing interest in covered bonds, a more traditional and conservative form of securitisation, in which assets remain on the issuers’ balance sheet.
Moody’s expects further bundling and listing of Indonesian home loans following the success of the country’s first-ever residential MBS transaction last week.
The state housing lender Bank Tebungan Negara sponsored the Rp100bn ($8.2m) issue, which was small by international standards but could mean further deals now that regulatory issues have been clarified.
“Many originators had been waiting for this first transaction to complete so that they can reference the structure and the various rulings and opinions in deciding whether or not to follow suit,” Moody’s said.
China launched securities backed by car loans for the first time in 2008, but prospects in China remain uncertain following the end of the China Banking Regulatory Commission and the People’s Bank of China’s pilot securitisation programme. No further plans have been revealed.
Copyright The Financial Times Limited 2009
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