Carry trade bonanza

Asian governments and quasi-government entities have issued record volumes of debt this year. This, combined with strong currency moves, is fuelling swaps activity in the markets. Can it last? William Rhode reports


The last six months have seen a rash of activity in Asian sovereign and quasi-sovereign debt issuance, with Asian borrowers raising more than $45 billion through bonds denominated in G3 currencies as of October 19. That compares with just $16.8 billion last year, and already exceeds the previous all-time annual issuance high of $43 billion in 2005.

“These yearly figures are especially impressive,” says Patrick Tsang, director for debt capital markets at Deutsche Bank in Hong Kong. “For sovereign

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