Stronger Apac corporate and financial institution credits continue to attract capital and execute benchmark deals, even as higher oil prices widen differentiation across the region.
Portfolio inflows into global emerging markets (EM) amounted to $58.3 billion in April 2026, according to the Institute of International Finance, reversing a $66.2 billion outflow in March, led by debt investments with emerging Asia receiving the largest share.
While this points to continued investor demand for Asian debt, investor appetite also remains diverse and shaped by issuer credit quality.
Some EM face currency pressure – including India, Indonesia, the Philippines, Sri Lanka and Thailand – since the start of the Iran war. This may reflect sovereigns’ oil-import dependence and fuel buffers, as well as the perceived room for policy responses to mitigate the economic impact of the shock.
April FX reserve data point to some divergence across Apac sovereigns. The Philippines’ and Sri Lanka’s FX reserves fell by 8% and 7%, respectively, between February and April 2026 – more than the roughly 4% for India and Indonesia, and 2% for China and Thailand. Gross reserves only show a partial picture, however, as some authorities may have intervened heavily in the forward market.
This matters for deal flow because sovereign quality helps shape funding conditions for their financial and non-financial corporate issuers. Debt markets should benefit from countries’ stronger external positions, deeper domestic funding markets and greater policy space to respond to the shock.
In weaker external environments, prolonged FX pressure could feed through into tighter liquidity and higher funding costs for financial institutions.
These themes are explored further in Fitch Rating’s report, Stronger Credits Lead APAC Capital Flows and Deal Activity, which examines how credit quality, external positions and market conditions are shaping capital flows and deal activity across the region.
The report is unlocked for access for a limited time and available here: Stronger Credits Lead APAC Capital Flows and Deal Activity
Authors:
- Thomas Rookmaaker, Head of APAC Sovereigns, Fitch Ratings
- Jonathan Cornish, Managing Director, Head of APAC Banks, Fitch Ratings
- Laura Zhai, Head of APAC Natural Resources, Fitch Ratings
- Harry Hu, Senior Director, Credit Commentary & Research, Fitch Ratings
For more commentary from Fitch Ratings on the region, please click here
