ASEAN Plus Three's Sustainable Bond Market Posts Strong Growth in 2023
The sustainable bond market of the Association of Southeast Asian Nations (ASEAN) member countries, China, Japan, and South Korea expanded 29.3% in 2023.
IDXChannel - The sustainable bond market of the Association of Southeast Asian Nations (ASEAN) member countries, China, Japan, and South Korea expanded 29.3% in 2023, outpacing the 21% growth of the global and euro-area sustainable bond markets, according to a new report by the Asian Development Bank (ADB).
Outstanding sustainable bonds in these economies, known collectively as ASEAN+3, reached USD798.7 billion by the end of 2023 and accounted for around 20% of global sustainable bonds, according to the latest edition of Asia Bond Monitor, released today (21/3/2024).
“ASEAN sustainable bond issuance made up a higher share of local currency financing and long-term financing in 2023, driven by public sector participation,” said ADB Chief Economist Albert Park in a media release.
“The public sector’s participation not only adds to the supply of sustainable bonds, but also serves as a model case for the private sector and helps set a long-term pricing benchmark for these bonds in domestic markets," Park added.
ASEAN markets recorded USD19.1 billion of sustainable bond issuance last year, accounting for 7.9% of aggregated issuance in ASEAN+3 sustainable bond markets. This compares with ASEAN’s 2.5% share of ASEAN+3’s general bond issuance.
ASEAN recorded a higher share of local currency financing and long-term financing in sustainable bond issuance, with 80.6% of sustainable bond issuance denominated in local currency and a size-weighted average tenor of 14.7 years. This outperformed the corresponding numbers of 74.3% and 6.2 years in ASEAN+3, and compares with 88.9% and 8.8 years in the euro area.
The global and euro-area sustainable bond markets reached USD4.0 trillion and USD1.5 trillion, respectively, by the end of 2023. Sustainable bonds are bond instruments that are used to finance projects and programs with environmental and social benefits. (WHY)