Mubasher: Corporate debt markets in Brazil, China, South Africa, and Thailand are well-positioned to witness more growth in the next years, according to a report released by Moody's Investors Service on Tuesday.
Among 35 emerging markets, the four countries achieved the largest growth in the ratio of mutual funds and insurance portfolio assets to the gross domestic product (GDP) over the period between 2010 and 2016.
“The development of corporate bond markets provides companies with an alternative source of funding beyond bank lending,” Moody's AVP-Analyst and the report's co-author, Ruosha Li, said.
“This can help to mitigate declines in real economic activity from credit disruptions associated with a banking crisis," he noted.
The report remarked that the increase in local corporate bond markets is driven by a growth in the assets under management (AUM) of local mutual funds, an increase in investment portfolios of insurance companies, and a reliable regulatory system.