Liquidity drains from Asian bond markets

Traders hold less bond inventory as banks cut back on risk assets.

Asia’s dollar bond markets have had a watershed year, with total new issuance up 70% from the whole of last year surpassing $100 billion for the first time, according to Dealogic.

The story behind this meteoric rise is oft told rates are at record lows and banks have retreated from loan markets. The Lehman crisis, which saw many banks pulling credit lines, served as a brutal wake-up call for many Asian companies, which are now...

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