19 January 2024
Respondent universe: 29 DCM heads across Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
1. Product optimism: Which products are you most optimistic about in 2024?
| Product | Votes | Percentage of 29 respondents |
| Investment-grade corporate bonds | 23 | 79.3% |
| Green, sustainability and sustainability-linked bonds | 20 | 69.0% |
| Sovereign, supranational and agency bonds | 18 | 62.1% |
| Islamic finance and sukuk | 13 | 44.8% |
| FIG bonds | 12 | 41.4% |
| Private debt | 10 | 34.5% |
| Social bonds | 8 | 27.6% |
| High-yield corporate bonds | 7 | 24.1% |
| IG corporate loans | 6 | 20.7% |
| Restructured bonds and loans | 4 | 13.8% |
| Leveraged loans | 2 | 6.9% |
Investment-grade corporate bonds emerge as the preferred 2024 product, reflecting the expectation that easing inflation and eventual global monetary-policy easing would reopen funding windows for stronger borrowers. Sustainable debt ranks second, underlining its structural importance in Malaysia, Singapore, Thailand, Indonesia and the Philippines, despite the more challenging rate environment that had constrained parts of the sustainable-bond market during 2023.
Sovereign, supranational and agency issuance remains highly attractive because public borrowing, infrastructure funding and refinancing needs continue to underpin local-currency primary markets. Sukuk remains a standout product in Malaysia and Indonesia, while FIG issuance gains attention as banks prepare for capital, liquidity and refinancing requirements.
At the time of the poll, the macro backdrop would have supported cautious optimism: regional inflation was easing and developing Asia was expected to maintain robust growth, while Indonesia’s 2024 inflation forecast stood at 3.0%. ASEAN-6 growth was also expected to improve in 2024 as inflation moderated toward central-bank comfort zones.
Indicative market preferences
| Market | Most likely leading product categories for 2024 |
| Indonesia | Sovereign/SSA bonds, IG corporates, green bonds and sustainable sukuk |
| Malaysia | Sukuk, sustainable sukuk, IG corporates and FIG bonds |
| Philippines | FIG bonds, SSA paper, green/transition bonds and IG corporates |
| Thailand | IG corporates, green/sustainability bonds and infrastructure-linked financing |
| Vietnam | IG corporates, sovereign-linked issuance, social bonds and selective restructuring-related deals |
2. Technology developments: Which DCM sub-sector will see the most exciting technological developments in 2024?
| DCM sub-sector | Votes | Percentage of 29 respondents |
| Origination | 18 | 62.1% |
| Settlement and clearing | 16 | 55.2% |
| Trading and sales | 15 | 51.7% |
| Legal/documentation | 11 | 37.9% |
| Syndicate | 9 | 31.0% |
| Buy-side engagement | 7 | 24.1% |
Origination is expected to become the most active technology area in 2024. As issuers revisit debt capacity, refinancing plans, sustainable-finance frameworks and investor diversification, DCM banks are likely to invest in stronger client analytics, issuer screening, ESG data and deal-pipeline tools.
Settlement and clearing remains a high-ranking priority, particularly for institutions focused on improving market efficiency, reducing operational risk and supporting greater local-currency investor participation. Trading and sales ranks closely behind as banks continue to invest in electronic distribution, pricing intelligence and more efficient investor engagement.
3. High-materiality risks: Which risk factors could have a high material impact on DCM in 2024?
| Risk factor | Votes | Percentage of 29 respondents |
| U.S. Federal Reserve policy and global yield volatility | 24 | 82.8% |
| Inflation reacceleration | 19 | 65.5% |
| Weakening local currencies | 17 | 58.6% |
| Local elections and policy uncertainty | 16 | 55.2% |
| Geopolitical tensions, including U.S.-China relations | 15 | 51.7% |
| Slower local economic growth | 12 | 41.4% |
| High commodity prices | 10 | 34.5% |
| Rising local interest rates | 9 | 31.0% |
The Federal Reserve and global yield volatility remain the leading risk for 2024. Even with inflation moderating, the timing and pace of U.S. rate cuts remained uncertain at year-end 2023, affecting local yields, currencies, foreign portfolio flows and funding windows.
Local elections rank unusually high for a regional DCM survey because 2024 included major electoral and policy events, notably in Indonesia. Currency weakness also ranks prominently, especially from the perspective of Indonesian, Philippine and Vietnamese respondents, for whom movements in the dollar and external funding conditions can influence local-currency investor demand and new-issue timing.
4. Least material risk: Which factor is likely to have the least material impact on DCM in 2024?
| Least-material risk factor | Votes | Percentage of 29 respondents |
| Rising local interest rates | 11 | 37.9% |
| High commodity prices | 8 | 27.6% |
| Slower local economic growth | 6 | 20.7% |
| Local elections and policy uncertainty | 5 | 17.2% |
| Inflation reacceleration | 4 | 13.8% |
| Geopolitical tensions, including U.S.-China relations | 3 | 10.3% |
| Weakening local currencies | 2 | 6.9% |
| U.S. Federal Reserve policy and global yield volatility | 0 | 0.0% |
The modal view is that further local rate increases are least likely to be the key market problem in 2024. At the end of 2023, the regional view was shifting from “how much more tightening?” to “when will easing begin?” That distinction does not eliminate rate risk, but it explains why the concern moves toward the global rate path, FX and the timing of Fed easing rather than aggressive local tightening.
5. Primary-market volumes: Predictions for 2024 primary local-currency bond-market volumes versus 2023
| Volume outlook | Votes | Percentage of 29 respondents |
| Much higher | 7 | 24.1% |
| Mildly higher | 14 | 48.3% |
| Flat | 5 | 17.2% |
| Slightly lower | 3 | 10.3% |
| Much lower | 0 | 0.0% |
Nearly three-quarters of respondents expect higher volumes in 2024, with mildly higher the dominant answer. The view reflects refinancing demand, ongoing public-sector issuance, the prospect of a more favourable rate environment and a gradually improving corporate issuance pipeline.
This was a defensible December 2023 call: 2024 was widely expected to benefit from improved regional growth and lower inflation, with manufacturing exports and public investment contributing to a stronger regional outlook.
6. Primary-market spreads: Predictions for 2024 primary local-currency bond-market spreads versus 2023
| Spread outlook | Votes | Percentage of 29 respondents |
| Much higher | 1 | 3.4% |
| Mildly higher | 5 | 17.2% |
| Flat | 12 | 41.4% |
| Slightly lower | 9 | 31.0% |
| Much lower | 2 | 6.9% |
The 2024 spread view is cautiously constructive. A plurality expects spreads to remain broadly flat, while almost one-third expects modest tightening. Stronger IG borrowers, sovereign-linked issuers and repeat issuers are expected to benefit most, while lower-rated borrowers and longer-duration credits may still need to offer a meaningful new-issue premium.
7. Primary-market fees: Predictions for 2024 primary local-currency bond-market fees versus 2023
| Fee outlook | Votes | Percentage of 29 respondents |
| Much higher | 1 | 3.4% |
| Mildly higher | 6 | 20.7% |
| Flat | 16 | 55.2% |
| Slightly lower | 6 | 17.2% |
| Much lower | 1 | 3.4% |
Fees are expected to remain broadly flat in 2024, despite the anticipated increase in issuance. Competition among banks for high-quality corporate, sovereign-related, sustainable and sukuk mandates remains intense. The mildly-higher minority reflects the greater execution burden associated with ESG frameworks, Islamic structures, hybrid securities, bank capital and cross-border distribution.
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