Alibaba to Baidu lead surge in equity-linked bond sales in Asia
Asian sales of bonds that can be turned into shares have soared in 2025, heading toward multiyear highs, as interest rates remain elevated and rallying stocks create the right conditions for this corner of the market to thrive.
Led by Chinese companies, firms in the region have sold more than US$30 billion (S$38.5 billion) of convertible and exchangeable bonds in 2025, up from over US$20 billion in the same period a year earlier, according to data compiled by Bloomberg. Offerings denominated in US and Hong Kong dollars have been particularly popular.
Concerns about inflation from US tariffs have
kept Federal Reserve officials from cutting rates, making instruments such as convertibles that pay little, or even no interest, more attractive for borrowers. For investors, these hybrid securities offer a way to ride the recent rally in Chinese stocks – with limited downside.
'It's been an extraordinarily busy year and it will continue to be busy,' said JPMorgan Chase & Co head of Asia Pacific equity linked and private capital markets Gautam Sareen. 'Market conditions have never been healthier.'
Demand has been so high for equity-linked securities that all of Asia's five largest issuances in this space didn't have to pay any interest.
China's Baidu, Alibaba Group Holding and Ping An Insurance (Group) Co. of China were among the biggest issuers of these hybrid instruments in 2025.
Baidu raised US$2 billion from the sale of notes exchangeable into shares of online-travel agent Trip.com Group, while Alibaba sold HK$12 billion (S$2 billion) of bonds that can be turned into shares of Alibaba Health Information Technology, following other issuers in taking advantage of the lower funding costs in the Hong Kong dollar compared to the greenback. Ping An raised almost HK$12 billion from its convertible.
Top stories
Swipe. Select. Stay informed.
World Trump arms Ukraine and threatens sanctions on countries that buy Russian oil
Multimedia From local to global: What made top news in Singapore over the last 180 years?
Singapore Turning tragedy into advocacy: Woman finds new purpose after paralysis
Singapore HSA intensifies crackdown on vapes; young suspected Kpod peddlers nabbed in Bishan, Yishun
Opinion Sumiko at 61: When beauty fades, why do some accept it better than others?
Singapore Man charged over distributing nearly 3 tonnes of vapes in one day in Bishan, Ubi Avenue 3
Singapore Man allegedly attacks woman with knife at Kallang Wave Mall, to be charged with attempted murder
Singapore Ex-cop charged after he allegedly went on MHA portal, unlawfully shared info with man
China's stock market 'felt quite solid right after Liberation Day and then rebounded very, very quickly,' said Mr Brian Chau, co-head of equity-linked Asia at UBS Group. 'The APAC market is at a record strength.'
Elsewhere, Grab Holdings and MakeMyTrip also had big offerings, as did ailing carmaker Nissan Motor, which recently raised ¥200 billion (S$1.74 billion) from one of Japan's biggest convertible bonds in years. In South Korea, LG Chem's US$1 billion exchangeable bond in May revived a market that had dried up in the country in the wake of a 2023 short-selling ban that was only lifted a few months ago.
And although a flare-up of tensions on the geopolitical front or a negative shock for the global economy could shut the issuance window quickly, expectations remain high for offerings to keep flooding in.
Mr Saurabh Dinakar, head of Asia Pacific global capital markets at Morgan Stanley, said that DeepSeek's sudden emergence as an artificial-intelligence powerhouse and Chinese companies' low valuations helped kickstart the rally earlier this year, and the outlook remains bright.
Investors now feel that valuations in China are 'at a bit of an inflection point and as a result they are wanting to get involved and engage in certain sectors,' Mr Dinakar said. 'Assuming that we don't have a wobble from a geopolitical standpoint, our view is that the market will remain active for the balance of the year.' BLOOMBERG
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
12 minutes ago
- Business Times
US tariffs risks turning global trade into ‘arm-wrestling match': Vivian Balakrishnan
[COLORADO] Global trade risks becoming a 'bilateral arm-wrestling match' following US President Donald Trump's approach of slapping tariffs on its partners, according to Singapore Minister for Foreign Affairs Dr Vivian Balakrishnan. Such an imposition may trigger a strong temptation from the other side to impose reciprocal tariffs. 'Instead of a rules-based global system that promotes trade, you now have a system where every trade agreement becomes a bilateral arm-wrestling match,' he said in a fireside chat during the Aspen Security Forum in Colorado on Wednesday (Jul 16). 'You end up in an escalatory spiral.' Dr Balakrishnan's comments come as Trump said he would notify more than 150 countries of how much levies Washington would place on their exports, with 10 per cent being the minimum. Singapore has yet to receive a letter from Trump, he added. Singapore is heavily reliant on global trade and its exports are often seen as a bellwether for the health of Asian economies. The Republic this week reported faster-than-expected growth in the second quarter on strong manufacturing and services exports as businesses seek to front-run higher US tariffs. The 10 per cent tariff imposed by the US 'does not quite compute', said Dr Balakrishnan, given that the US and Singapore have run a free trade agreement since 2004, with America running a trade surplus against the nation. Deputy Prime Minister and Minister for Trade and Industry Gan Kim Yong will be visiting the US this month for trade talks that are expected to include discussions on pharmaceutical supply chains. BLOOMBERG
Business Times
42 minutes ago
- Business Times
India's private market boom set to continue, as investors keep shunning China
[SINGAPORE] A surge in the value of private equity (PE) deals signed in India in the first half of this year, coupled with the inking of the country's biggest private credit transaction, are adding fuel to a hot private market. With investors still keeping away from China, traditionally the largest Asian private market, the strong growth in India, in contrast, has been drawing the likes of Temasek, BlackRock and EQT to their hunt for deals. LSEG's data provided to The Business Times shows the value of PE or buy-side sponsor-backed mergers and acquisitions in India soared to US$11.7 billion in the first six months of this year. This was up 88 per cent from the same period in 2024, although the number of deals fell 25 per cent over the same timeframe, to 224. Even with the near-doubling in the value of PE deals, and the record private-credit refinancing by conglomerate Shapoorji Pallonji Group, industry players see no sign of let-up in India's private markets. In fact, they say it will lead the charge in the Asia-Pacific for at least the next five years. This is underpinned by the size of India's economy, its growth trajectory and the youth of its people. The country has a one-billion-strong working population at a median age of 28 years; in 2030, an estimated 36 million families will be nearing the 'affluent' category, that is, earning an average annual income is around US$37,500, making the country one of the biggest growth drivers at Swedish buyout firm EQT. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Hari Gopalakrishnan, partner and head of India at EQT Private Capital Asia, told BT: 'With the Indian economy close to US$4 trillion today, and the overall buyout volume last year was only about US$15 billion ... we still think it is under-penetrated.' Citing the nine-fold growth in India's economy between 2000 and 2024, he said India's economy could expand to between US$8 trillion and US$15 trillion in the next decade or two, if it grows at an annual rate of up to 7 per cent. India's buyout market remains 'under-penetrated,' says Hari Gopalakrishnan, partner and head of India at EQT Private Capital Asia. Four jumbo deals Four deals in the first half of this year were worth at least US$1 billion, including the largest insurance transactions seen in India. Topping the list is German insurer Allianz's sale of its 26 per cent stake in Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance for around US$2.8 billion to the Bajaj Group. Another mega deal was global investment firm KKR's exit from its investment in JB Chemicals through a sale to Torrent Pharmaceuticals for US$1.4 billion in late June. Apart from India's robust economic growth trajectory, industry observers also expect the country to continue receiving the capital that is avoiding China. Beelee Seah, partner at Norton Rose Fulbright, said: 'Investors are re-allocating funds that historically have been deployed into China-focused investments, and India – along with some countries in South-east Asia – are benefiting from this 'China plus one' strategy. Soon enough, if not already, investors are looking at India as a core allocation, rather than an emerging-market allocation.' While China remained the biggest PE market for the Asia-Pacific last year in terms of deal value, its growth was modest, and its market share continued to fall, Bain & Co said in a report in March. India was the region's top performer, notching a double-digit growth in deal value and count. That finance and healthcare sectors are leading this first half's deals reflect the rise of India's middle class, along with their needs for financial planning and healthcare, industry players said. Gopalakrishnan said: 'We've historically invested in tech services, healthcare, financial services, and we're looking to add more sectors while deepening our presence in these existing sectors.' The frenetic pace of deal-making however, is leading investors and PE fund managers, known as general partners (GPs) to be wary of overvaluation. Overvaluation concerns In a May report citing a survey of 110 Asia-Pacific fund managers, Bain noted that 75 per cent listed high entry valuations as a key challenge or concern for India. 'We don't think India is a value compared to other emerging markets,' said Vish Ramaswami, head of Asia-Pacific private investments at Cambridge Associates. 'It's a generally rich, fully-priced market, and there's a scarcity value for assets such as hospitals.' Vish Ramaswami, head of Asia-Pacific private investments at Cambridge Associates, says India is a fully-priced market, and not a value buy relative to other emerging markets. PHOTO: CAMBRIDGE ASSOCIATES In healthcare in particular, an industry observer said India's multiples are higher than those in South-east Asia, where they are at unprecedented levels of Ebitda multiples in their 20s. He was referring to earnings before interest, taxes, depreciation and amortisation. But other industry participants disagree, arguing that the Indian market is big enough for investors to find deals. Pallavi Gopinath Aney, partner and joint chair of India group at law firm A&O Shearman, said: 'There is always a risk of overvaluation in any booming market with multiple players competing for available assets, but in India overall, macroeconomic fundamentals have remained strong.' The firm was the legal counsel to Mumbai International Airport's US$750 million financing by US-based Apollo finalised in June. Pallavi Gopinath Aney, partner and joint chair of India group at law firm A&O Shearman, says India's private capital boom is underpinned by strong macroeconomic fundamentals. PHOTO: A&O SHEARMAN In private credit, India has also been hogging the headlines. Apart from the Mumbai airport deal, there was the US$3.4 billion refinancing of local real estate and construction conglomerate Shapoorji, which is India's largest private debt transaction on record. The zero-coupon non-convertible bonds offer an annual yield of 19.75 per cent paid at maturity of three years, to about a dozen investors. These include Ares Management, Cerberus Capital Management, Davidson Kempner Capital Management and Farallon Capital Management. The terms reportedly include three layers of protection for creditors, with one raising concerns: Shapoorji pledging its stake in privately-held Tata Sons worth more than US$18 billion as collateral. Since Shapoorji's holding in Tata Sons might not be transferable, there are questions that creditors may be relaxing their requirements to get into India's hot private debt market. Declining to comment on the Shapoorji deal, Dinesh Goel, partner at Ares Credit Group, told BT: 'We are a decent distance away from a situation in which you would say there is too much capital chasing too few opportunities. 'That's where you see investors going in for risks that they should not have taken. But I don't think they are anywhere close to that.' One point is undeniable: rising competition in the Indian private debt market. Apart from the attractive demographics and India's positive economic growth trajectory, creditor protection has also been enhanced since the country passed its first insolvency and bankruptcy code in 2016, said Andrew Tan, chief executive officer for the Asia-Pacific at Muzinich & Co. 'There's competition from both local players and foreign players,' said Tan, who is also head of Asia-Pacific private debt. The rivalry is more intense for loans to bigger companies, for which more funds are clamouring to participate. That is where creditors are seeing returns fall, he added. On senior secured deals, investors could receive yields of between 10 and 12 per cent around four years ago. Now, it's in the 7 to 10 per cent range. But given the size of the Indian market, Tan said there is 'still good value' in the core middle-market segments, where a company's Ebitda is between US$20 million and US$50 million.
Straits Times
2 hours ago
- Straits Times
Thailand to offer Trump no duties on 90% of US goods, adviser says
Thailand is still in talks with the US to reduce a proposed 36 per cent tariff on its exports. BANGKOK – Thailand is set to offer scrapping tariffs on 90 per cent of American goods, up from a previous plan for over 60 per cent, in a bid to avert a punishing levy threatened by President Donald Trump, according to a business group advising Thai negotiators. Bangkok's third proposal would potentially eliminate tariffs and non-tariff barriers on about 10,000 US products, Mr Chanintr Chalisarapong, vice-chairman of the Thai Chamber of Commerce, told Bloomberg News in an interview on July 17. He added that he expects the final tariff on Thailand will be set in a range of 18 to 20 per cent, down from Mr Trump's most recent threatened level of 36 per cent. The new proposal, which will be presented to Washington in a conference call on July 17, could reduce Thailand's US$46 billion (S$59 billion) trade surplus with the US by 70 per cent within three years and lead to balanced trade within five years, according to Mr Chanintr. The new figures are even more ambitious than Thailand's July 6 offer to cut tariffs on over 60 per cent of products and eliminate the trade gap in seven or eight years. 'I expect our proposal to be solid and practical. The numbers should be satisfactory to the US,' said Mr Chanintr, who has consulted with negotiators led by Finance Minister Pichai Chunhavajira over the past week to finalise details. 'What we'll be offering is potentially more than Indonesia and Vietnam,' he said. 'Since we're a manufacturing country, we have potential to use a lot more US goods and process them into products that we can export.' Top stories Swipe. Select. Stay informed. Singapore Fatal abuse of Myanmar maid in Bishan: Traffic Police officer sentenced to 10 years' jail Singapore Man charged over manufacturing DIY Kpods at Yishun home; first such case in Singapore Singapore HSA launches anti-vaping checks near 5 institutes of higher learning Business 5 things to know about Kuok Hui Kwong, tycoon Robert Kuok's daughter and Shangri-La Asia head honcho Singapore Jail for elderly man for using knife to slash neighbour, who later died of heart disease Singapore Maximum $7,000 fine for caterer involved in ByteDance food poisoning case World UK to lower voting age to 16 in landmark electoral reform Opinion Grab tried to disrupt taxis. It now wants to save them Thailand is one of the South-east Asian countries racing to finalise terms with the US. Failure to secure a reduced tariff with its largest export market, which accounted for about 18 per cent of Thailand's total shipments in 2024, could result in a sharp decline in merchandise shipments and shave as much as a percentage point off its projected export-driven economic growth. Mr Trump has announced deals for 20 per cent tariffs on Vietnamese goods and 19 per cent for Indonesia, though transshipments through both countries would face higher levies. Tax exemptions, more imports Bangkok rushed to sweeten its proposal after Mr Trump announced last week that the 36 per cent tariff level on Thailand would start on Aug 1. Mr Pichai, who submitted a second proposal by then, said he was shocked and had been expecting a lower number. Thailand's new proposal may include a tax exemption for US digital services that operate in Thailand or serve Thai customers, Mr Chanintr said. It may also pledge more imports of liquefied natural gas, Boeing planes, and key US food and agricultural products. The latter could include corn, soybeans and barley, which are important to Trump voters in rural states, he added. Cheap US food and farm products are expected to help cut costs for the Thai pet food industry, which exports heavily to other countries. Lower costs for Thailand's animal feed industry will also likely boost productivity for the domestic poultry, livestock and food-processing industries down the value chain, Mr Chanintr said. Mr Pichai, who has said he is pushing for a best-case rate of 10 per cent, is expected to hold more talks with US Trade Representative Jamieson Greer. In their meeting in Washington earlier this month, Pichai agreed to cut import taxes for US products that are in short supply in Thailand and tighten rules to prevent transshipments. 'We'd like for talks to conclude soon so that trade can continue. There's been too much uncertainty,' Mr Chanintr said, adding he is confident Thailand can secure a deal before Aug. 1. 'We're so close to the finish line.' Thai growth is already under pressure from Southeast Asia's highest household debt and sluggish domestic consumption. A favourable deal would also ease investor concerns stoked by political turmoil following the court-ordered suspension of Prime Minister Paetongtarn Shinawatra over alleged ethical misconduct in handling a border dispute with Cambodia. Thailand's exports rose about 15 per cent in the first five months of 2025, driven largely by frontloading during the 90-day pause to allow tariff talks. 'This is a global trade war, not a bilateral one,' Mr Chanintr said. 'Don't forget how high the stakes are.' BLOOMBERG
