亚洲债券供需监测

Bond Demand-Supply Monitor Joey ChungStrategist+65-6423 8298Vaninder Singh, CFAMacro Strategist Highlights from this edition of our monthly Asia bond demand-supply monitor; 1.CGBs. Issuance is heavy amidst front-loaded fiscal support; but investordemand too has surprised positively – from WMPs, lifers, and banks.2.IGBs. A surprisingly big jump in both net and gross supply from the FY26- 27 Budget, and which will likely necessitate more RBI support. Perry KojodjojoStrategist 3.IndoGBs. Better demand from pension funds and lifers should support theback-end, but we remain cautious of the supply outlook. 4.KTBs. Investors' aversion to duration risk has risen due to BoK's hawkishpolicy stance, but we think the curve steepness is likely near its peak Sameer GoelMacro Strategist 5.MGS/MGII. Foreign inflows into bonds have been surprisingly muteddespite MYR outperformance.+65-642-36973Bryant XuStrategist 6.RPGBs. A possible "jumbo" 10Y issuance in February could make for anattractive re-entry point for RPGBs. 7.SGS. Demand for SGS could cool near-term as USTs asset-swapped toSGD yield better at present. China Front-loaded government bond issuance to support growth. China's bondissuance accelerated significantly in January, indicating intent by the authorities tofront-load fiscal support amid recent economic weakness. Net issuance reachedRMB 1.2tn, a 27% increase and nearly double the 3Y average for the month. Thetotal comprised of 427bn in CGBs and 754bn in LGBs (including 368bn in special This trend is consistent with our expectation of more proactive fiscal policy, a viewsupported by recent MoF guidance. We anticipate further acceleration in LGBissuance, as the MoF has pre-allocated a portion of the 2026 debt quota ahead ofthe full-year approval at the March NPC. This allows local governments to Despitethe elevated supply,investor demand has surprised positively, particularly for the belly and long-tenor maturities, marking a rebound from aweaker December. We attribute this strong demand to two factors: (a) WMPs andlife insurers increasing their fixed income allocation after recent equity market India FY26-27 budget surprised on both net and gross supply.We had expected netsupply to come in flat or possibly even show a mild dip, instead of the 2.6% yoyincrease. Meanwhile, gross supply displayed none of the mitigations we had This comes against the earlier negative demand surprise with India's inclusion into On net, the upwards supply surprise of ~1.2tn or 0.3% of GDP would bias 2Y/10Ycurve upward by ~10bp, all else equal – fully justifying the move since mid-January. Focusing on the demand side of the ledger, continued RBI support will be nWe expect demand from pension funds to sustain as growth – and wages– improve. uptick in the first year premiums of late.nFinally, we expect demand from banks to fade a tad as the end-of-cyclesteepening dynamics play out. Indonesia Domestic demand for bonds is shaping up to be more favorable this year. two-quarters, rose 39% 6m/6m saar in October (Figure 4).nSimilarly, lifer premium growth, which tends to lead lifers' bond holdings by one-quarter, rose 61% 6m/6m saar in November (Figure 5).nMeanwhile, mutual fund demand – which has already risen substantially since mid-2025 – could moderate going forward in line with total bondreturn expectations (Figure 6). The outlook on bond supply though is more negative.We had previously estimated a 10% yoy increase in net bond supply (external + domestic) for 2026, butthis figure is now likely to end up closer to 20%. In turn, net IndoGB supply isexpected to be higher by 16% yoy vs the 7% we previously estimated (Figure 7). Thisis because the parliament-approved version of the Budget bill has revised the deficit Smaller fiscal buffers could exacerbate any headlines around deficit revision inthe middle of the year.Note that market tends to react to the headline changes infiscal deficit even when the same has not impacted bond supply in past years. The Korea January's bond issuance fell short due to weak long-end demand.Despite thegovernment's intention to accelerate Q1 issuance (targeting 27-30% of the annualtotal), January's gross issuance was slightly below recent trends, at 8% of theannual plan versus a three-year average of ~9%. This shortfall can be attributed totepid investor appetite, particularly for duration. Recent long-tenor KTB auctionssaw record-low bid-to-cover ratios for the 20Y and 30Y tranches, underscoring Curve steepness is nearing its peak.The KTB curve has steepened considerably,driven partly by concerns about a potential supplementary budget. We think thisshould be nearing its peak. The Finance Minister has recently denied plans for an Several technical factors also support a potential reversal in the steepening trend: nValuations.The 2Y/10Y curve has already steepened by 58bp over the last12 months and the spread is trading in the 88th percentile of its 5-year nStructuralDemand.Th