Asia has been slow to grasp green bonds but there are signs that issuers are beginning to consider this type of financing, especially for infrastructure projects. But the sector faces a struggle as environmental concerns remain low on the list of priorities.
Bank of China has racked up another first with the inaugural green covered bond from the mainland. The deal’s unique structure garnered international attention, supporting the country's pursuit of leadership in green bonds.
After three years of arduous development by the International Finance Corporation, the first 'forests bond' hit screens on Monday, and the issuer hopes to come back for more.
Hong Kong rail operator MTR Corp sold its debut green bond on Monday, attracting orders worth $1.4bn. The deal saw strong support from European accounts in particular, thanks to the rarity and quality of the credit.
Modern Land (China) Co ventured out with its maiden green bond on Thursday. It not only achieved the largest size for its dollar bonds to date, but also paved the way for the country’s property developers to come to the international green debt market.
Green finance in China, particularly the domestic green bond market, has taken off this year, in part to the strong policy support from the Chinese government. At a roundtable in early September, GlobalCapital and some of the market’s leading figures discussed the recent developments in China, including incentive schemes and whether the government’s top-down approach to green financing can be replicated by the rest of the world.
China is where it's at in green finance in 2016. Its brand new domestic green bond market has zoomed to be the world's biggest in no time, and it has become the first country to produce a comprehensive plan for greening all aspects of finance. Mutual investment between China and the West is set to rise, though some have qualms about funding 'clean coal', reports Julian Lewis.
The European Bank for Reconstruction and Development saw strong demand for its return to the public green bond market this week amid calls for regulators to avoid curbing the nascent industry.
Tsinghua University Science Park is planning to print what would be its inaugural dollar-denominated green bond, according to a source close to the matter.
Axis Bank revived Indian green bond issuance this week with the country’s third international deal. Financial institutions are expected to dominate the pipeline for the rest of the year, as the challenge of issuing offshore deters other borrowers, writes Narae Kim.
Zhejiang Geely Holding Group successfully priced its first international green bond on Thursday, keeping the momentum going for the asset class in China. The issuer opted for a standby letter of credit from Bank of China’s London branch in a bid to attract investors and cut its funding costs.
The future looks bright for China’s domestic bond market having started the year in full throttle with Shanghai Pudong Development Bank (SPDB) and Industrial Bank raising a combined Rmb30bn ($4.6bn). But while the volumes may be impressive, making sure issuers honour the green label will be the real test.
The green bond wave is set to rise higher in 2016, but as before, most of the deals will not help the environment much. One bond that did was sold in the closing days of 2015 — but such deals are still bought only by a small fraction of investors.
From Our Global Coverage
The socially responsible investment market for public sector bond issuers is shaping up for another busy year, with one agency planning a debut print in the next few months.
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Panda Bonds Top Arrangers
|Rank||Arranger||Total Volume Rmb (m)||No. of Deals||Share % by Volume|
|1||Bank of China (BOC)||8,500||7||18.01|
|3||Agricultural Bank of China (ABC)||5,000||4||10.59|
|5||Industrial and Commercial Bank of China (ICBC)||3,000||3||6.36|
Bookrunners of Asia-Pac (ex-Japan) ECM
|Rank||Lead Manager||Amount $m||No of issues||Share %|
|1||Haitong Securities Ltd||1,602.34||9||13.94%|
|3||China Securities Co Ltd||1,440.03||7||12.53%|
|4||Bank of China||1,188.86||5||10.34%|
|5||Guotai Junan Securities Co Ltd||689.79||3||6.00%|
Bookrunners of Asia Pacific (ex-Japan) G3 DCM
|Rank||Lead Manager||Amount $m||No of issues||Share %|
Asian polls & awards
China’s private banking industry is growing in leaps and bounds. High- and ultra-high-net-worth mainland customers are increasingly mobile, demanding best-in-class service from their financial providers. Banks are adapting to the changing world, rolling out innovative and sophisticated services to their high-end clientele. In recognition of China’s advances in the field, Asiamoney is proud to announce the winners of its awards for best mainland private banks for 2016.
Asia has taken its time in improving corporate governance standards, with experts agreeing on the need for broader action. But Taiwan and Hong Kong firms seem to be moving in the right direction, as shown in the results of this year's Asiamoney Corporate Governance poll. Paolo Danese reports.
Asiamoney is pleased to present its choices for Asia’s Best Managed Companies in 2016. In a year marked by political and economic upheaval, the region’s best firms and executives impressed on through a combination of factors including financial performance, innovation and strategic execution.
Analysts in Asia are used to dealing with dynamic and unpredictable markets but the events of this year provided a real test of mettle. Against a backdrop of global political upheaval and worsening economic outlook at home, the winners of Asiamoney’s 2016 Brokers Poll have proved they have what it takes to impress their clients.
Asia’s brokerages have needed to stay nimble in the face of volatile markets and changing regulation that has tested their industry. HSBC and CLSA are well placed to meet the challenge after coming out top in the Asiamoney Brokers Poll. Peter McGill reports.