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Taiwan's bond market has been through more profound shocks than most of its Asian neighbours over the last couple of years. A redemptions rush that began at United Securities in July 2004 following a default on interest payments by semiconductor manufacturer Procomp Informatic rumbled on into 2005, exposing the market's weaknesses.

2005 was a vintage year for Thailand's domestic bond market. New bond issuance rose by 43% to Bt1.95tr ($51.1bn) for the 12 months ending December 31 thanks to a spate of issues by state agencies and corporations. Better still, total debt outstanding reached Bt3.3tr compared with less than Bt500bn in 1997.

What are the main concerns for international borrowers raising money from the Asian local currencies market? EuroWeek asked funding officials at four of the world's leading issuers for their views.

Asia's diverse domestic currency markets share several common challenges, but all seem to have recognised the need for reform. However, regulators are taking their time in making much-needed changes, which is denying vital long term funding to companies and infrastructure projects in many countries. With international investors eager to increase their exposure to local currencies, Adam Harper finds that Asian bond markets are poised for greatness — if only governments will allow it.

China's domestic bond market has long been talked about as potentially the biggest in Asia; now the country's leaders look interested in making that dream a reality. Selected foreign issuers have been allowed to sell bonds in the market and authorities have given the green light to securitisation deals. But, as Adam Harper reports, there is a long way to go.

Domestic fixed income is fast becoming India's forgotten capital market. Investors are prevented from taking a view during a time of rising interest rates and borrowers can find cheaper funding elsewhere. Adam Harper finds that bankers are hoping for a relaxation in the rules and for capital expenditure requirements to drive borrowers back to bonds.

Indonesia's bond market has been one of the poorest performing in the region. In fact, it has gone backwards in the last few years.

South Korea's bond market, the biggest in Asia outside Japan, is an insular, stable affair. Although the Korean government is keen to promote it as a funding source, Adam Harper, discovers it is steadily shrinking and faces increasing scrutiny of the way it prices risk.

Malaysia rightly deserves its reputation as the most advanced market in Asia outside Hong Kong and Singapore. It is a more popular source of funding than bond markets elsewhere in Asia; it has established itself as a centre for Islamic finance in the region; it has a well developed asset management industry; and it has proved itself to be perhaps the most open to foreign investors and issuers.

Hong Kong and Singapore's local currency bond markets are often hailed as the models to which the rest of Asia's fledgling domestic capital markets should aspire. The region's two largest markets do offer efficient funding alternatives for certain issuers and volumes are growing across the board, but a mismatch between the demands of investors and borrowers is holding back further development. Steve Garton reports.

The Peruvian market is anxious before the second election round next Sunday. The main local index (IGBVL) rose 2.57%, after falling for three consecutive days, as confidence grew that Alan García will defeat Humala for the presidency. While there is little difference between the two on macroeconomic policy, with both candidates aiming for a fiscal deficit smaller than 1% of GNP, and maintaining inflation targets and a floating exchange rate, Humala is feared by investors because of his position on foreign investment. Peruvian economist Carlos Adriansen said: “Humala is openly hostile to the investment and the property, wants to review all the agreements and contracts”.