Singapore Exchange (SGX) today said it was aiming to be the home for Masala bonds globally after becoming a hub in Asia with more than 150 active bonds in total from Indian issuers listed to date.
“SGX is currently Asia’s Masala bond hub, and we have ambitions to be the home for Masala bonds globally. This will build on our current position as the leading exchange in Asia for debt listings from Indian issuers outside their home market,” said Singapore Exchange president Muthukrishnan Ramaswami.
With nearly 8 per cent of debt securities listed on SGX issued by Indian companies, and about USD 66 billion raised, SGX accounts for about 80 per cent of overseas bond listings by Indian companies. “More than 80 per cent of active G3 currency (USD, Japanese Yen, and Euro) listed bonds by Indian issuers are listed on our exchange,” Ramaswami said.
“Therefore, today’s event demonstrates our commitment and support in the internationalisation of India’s capital markets,” said Ramaswami. He also noted India’s requirement for capital for infrastructure financing, citing financing sector estimates of between USD 400-USD 500 billion over the next five to seven years.
Ramaswami estimates India’s top 100 corporations will be heading for international financing through bonds as the government wants them to raise funding from international and domestic markets.
With supporting policies by the Indian government, the newly accessible Masala bond market provides Indian corporates with a global investor base, opening up an avenue for Indian rupee denominated bonds to be traded overseas.
Last week, Indiabulls Housing Finance, one of India’s biggest mortgage lenders, listed its first Masala bond with SGX. “About 70 per cent of investors that participated in these recent issuances were from Asia, and we expect to see this positive trend continue,” he said.
The other two are NTPC and Adani Transmission.
The pipeline of issuers of Masala bonds is robust and the investor spectrum is broad—based, from fund managers to insurers, sovereign wealth funds, banks and private banks.
As Asia emerges as a core investor base for Masala bond issuers, SGX is well-positioned to capture increasing issuer demand for bond market access and the growing appetite for Masala bonds.
Since 2010, 17 rupee-denominated bonds have listed on SGX, raising a total of Rs 150 billion (USD 2.24 billion/SGD 3.5 billion) — and in 2013, SGX listed the very first global rupee bond from International Finance Corporation (IFC).
As the Masala bond market grows, SGX stands ready to support future Masala bond listings, with investor demand from Asia contributing significantly to demand for these issuances, assured Ramaswami. “We want to be the gateway for India for bonds and derivatives which can be accessed by international investors,” said Ramaswami.